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62d Congeess \ SENATE \ Document 

2d Session J } No. 618 



WORKMEN'S COMPENSATION 

3 
ft r 

HISTORY AND OPERATION 

OF WORKMEN'S COMPENSATION 

IN GREAT BRITAIN 

BY 

LAUNCELOT PACKER, LL. B. 

Secretary of the United States Employers' Liability 
and Workmen's Compensation Commission 



J^ 



PRESENTED BY MR. SUTHERLAND 
April 29, 1912.— Ordered to be printed 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1912 



V9V 






n nr ti 



TABLE OF CONTENTS. 

HISTORY OF COMMON LAW— ATTEMPTED LEGISLATION— LEGISLATION 
PRIOR TO WORKMEN'S COMPENSATION ACT. 

Page. 

Public opinion, changes in 5 

Common law of negligence 5 

Fellow-servant defense (reasons for and against) 5 

Assumption-of-risk defense (reasons for and against) 6 

Contributory-negligence defense 7 

Death actions 8 

Burden of proof 8 

Attempted legislation, 1875-1879 8 

Employers' liability act, 1880 9 

Contracting out 11 

Political economists' attitude 12 

Asquith bill, widest employers' liability 13 

United States, comparison with 14 



THE WORKMEN'S COMPENSATION ACT OF 1897 AND 1900. 



Reasons and Arguments in Parlia- 
ment on Passage of Acts. 



Page. 

The principle of the act 15 

Arguments for and against 16 

Scope of the bill 17 

Three tests of 18 

Seamen 18 

Workshops 19 

Buildings 19 

Government employees 19 

Malingering 19 

Acts of strangers 19 

Coal mining 19 

Agricultural laborers 20 

Prevention of accidents 20 

Burden imposed by the bill . . 20 

Cost 21 

Coal 22 

Bankruptcy of employer 22 

Choice of remedies and liability of 

employer 23 

Fellow-servant — Defense 23 

Assumption of risk — Defense 23 

Contributory negligence — Defense. 24 



Practical Workings of the Acts and 
Recommendations After 7 Years' 
Experience. 



Page. 



Scope of the acts 31 

Trade diseases 32 

Seamen 32 

Carriers 32 

Workshops 33 

Shop assistants (store clerks) . . 33 

Domestic servants 33 

Public servants 33 

Serious and willful miscon- 
duct 33 

Two weeks immunity — malin- 
gering 33 

Acts of strangers 34 

Act of 1900 — adding agriculture. . . 34 

Prevention of accidents 34 

Burden of the acts 35 

Cost 35 

Bankruptcy of employer 38 

Choice of remedies and liability of 

employer 38 

Fellow-servant — Defense 39 

Assumption of risk — Defense 39 

Contributory negligence — Defense. 39 
Comparison — Damages and com- 
pensation 40 

3 



CONTENTS. 



Reasons and Arguments in Parlia- 
ment on Passage of Acts — Contd. 



Arbitration and litigation. 



Appeals 

Costs 

Registration 

Lawyers 

Doctors 

Compensation payable . 



Death benefits . 

Incapacity benefits. . 
Lump-sum payments. 



Commutation, of weekly sums. 

Review of award. 

Manner of payment ..... 

Notice of accident and claim 

Contracting out , 



Page. 
24 

24 
25 
25 
25 
25 
26 

26 
26 
27 



27 
28 
28 
28 
29 



Practical Workings op the Acts and 
Recommendations After 7 Years' 
Experience — Continued. 

Page. 

Arbitration and litigation 40 

Arbitration provisions 41 

Appeals 41 



Doctors 

Compensation payable 

Beneficiaries 

Death benefits 

Incapacity benefits 

Lump-sum payments 

Minors 

Old men — Maimed persons. . . 
Commutation, of weekly sums. 
Review of award 



Notice of accident and claim 

Contracting out 

Contracting out of schemes. . . 

Government employees' 
scheme 



42 
43 
43 
43 
43 
43 
44 
44 
45 
45 

46 
46 
46 

47 



Beneficial effects of acts. 
Text of acts — 

1897 

1900 

1906. 



48 

50 
57 
59 



BRITISH WORKMEN'S COMPENSATION ACTS. 



HISTORY OF LEGISLATION AND ATTEMPTED LEGISLATION LEADING UP 
TO THE BRITISH WORKMEN'S COMPENSATION ACTS. 



CHANGING ATTITUDE OF PUBLIC OPINION AS TO RELATIONS OF 

MASTER AND SERVANT. 

The attitude of public opinion in England toward the relations of 
master and servant, of which the latest law regulating the accidents 
of industry is an outcome, is shown by the current decisions of judges, 
by attempted legislation, and by the legislation adopted. 

That this attitude has changed greatly with the times is illustrated 
by Parliament's expression of view in 1825, that "all combinations 
of workmen are injurious to trade," while in 1875 a diametrically 
opposite view was held, and legislation was enacted in accordance 
with that view, it being then admitted by the Conservative leader, 
Lord Beaconsfield, that "for the first time in the history of the 
country employer and employed sit under equal laws." Again, in 
1837 it is said that "principles of justice and good sense" require 
"that a workman should take on himself all the ordinary risks of his 
employment," while in 1897 the legislature said, "sound economic 
doctrine requires that the employer shall take all the ordinary and 
extraordinary risks involved in the carrying on of his industry." 1 

Examination of the workmen's compensation act of 1897, as 
amended in 1900, of the parliamentary steps by which it became 
law, and of its working, leads at the outset to an inquiry into judicial 
decisions of 60 years before, and the measures subsequently intro- 
duced into Parliament dealing with accidents which were the result 
of the growth and concentration of industries. 

Common Law of Negligence. 

In 1837 the general principles of the common law of negligence 
formed the only basis of recovery by a workman from his employer 
for an accident. Under these general principles a man was held to 
be responsible to others, including his servants, for injuries resulting 
from his own negligent acts, or from the negligent acts of his agents 
in the scope of their employment. 

FELLOW-SERVANT DOCTRINE. 

A decision rendered by Lord Abinger in 1837 under the common 
law of negligence, in the case of Priestly v. Fowler (3 Mees. & W. 1, 
Murph. & H., 305), is largely responsible for subsequent attempted 

iSee lectures by A. H. Ruegg, K. C. 



WORKMEN 's COMPENSATION. 



legislation and for legislation enacted affecting a master's responsi- 
bility to his servant in case cf negligence. In this decision was 
enunciated the doctrine "that a master could not be held responsible 
for an accident to his servant if such accident were caused by the 
negligence of a fellow servant," this being called "the fellow-servant 
doctrine/' or "the doctrine of common employment." This doc- 
trine, whether rightly or wrongly expounded in this decision, has 
operated as a defense to actions by servants against their masters 
for damages for injuries resulting from the negligence of their master's 
agents, if such agents were fellow servants, and has thus left the 
workman no redress in many cases where a stranger would have had 
redress. 

The fellow-servant doctrine has been supported on the ground of 
its expediency (as preventing accumulation of alarming liability), on 
the ground of "its tending to prevent accidents" (by making each 
servant watch his fellow servant), and on the ground of "contract" 
(it being held to be one of the "implied terms" of the contract of 
employment). On the other hand, it has been the subject of bitter 
attack ever since it was enunciated, the statement having been made 
that it was an exception to the general law of negligence, putting work- 
men in a worse position than strangers to their employer; that it 
tended to make employers less careful in the selection of their employ- 
ees; and that it was founded on a legal fiction, not on a voluntary 
contract. 

The doctrine was entirely repudiated in Scotland until imposed on 
that country by a House of Lords' decision in 1858 (Bartonshall Coal 
Co. v. Reed, 3 McQ., H. L. Cas., 266). Though it remains operative 
to a certain extent, as modified by the employers' liability act of 
1880, the practical workings of the workmen's compensation acts 
have largely counteracted its effect in the trades to which these acts 
apply. From allusions to it in debates in 1897 on the workmen's 
compensation act it seems likely to be soon entirely extinguished by 
Parliament. 

Opinions of lawyers have differed as to the soundness of the deci- 
sion, some holding that it rightly interpreted the existing common 
law, and others that it entirely without warrant engrafted a new 
doctrine into the law, but it is now according to high English legal 
authority almost universally admitted to be not only unjust, but also 
based on illogical reasoning. 

DOCTRINE OF ASSUMED RISK. 

The doctrine of assumed risk was another defense against an 
employer being held liable for accident, a doctrine generally based 
on an "implied term" in the contract of service. It was laid down 
in the case of Priestly v. Fowler (supra) that a servant "assumes all 
the ordinary risks which are incidental to his employment." (An 
important corollary of this doctrine of assumed risk is the afore- 
mentioned doctrine of fellow service, namely, that one of the risks 
incident to the service which the workman agrees to assume is the 
risk from the negligence of a fellow servant.) This implied term of 
his contract of service left the workman to bear the risks he knew or 
ought to have known, including the burden of dangers inherent in the 
business, such as unavoidable accidents, etc. 



workmen's compensation. 



This doctrine has been justified on the ground that the servant is 
as well able to guard against the risk as his employer and that it is 
calculated to secure fidelity and prudence on the servants' part; on 
the other hand, it has been doubted whether it has the effect claimed 
for it, and it has been suggested that the " dread of personal injury" 
has always proved sufficient to bring into exercise the vigilance of the 
servant. Another attempt to justify the doctrine, on the ground 
that the amount of the workman's wages is adjusted with reference 
to the character of these risks, is answered by the statement that 
this theory is borne out only to a very limited extent by the actual 
facts of everyday life. (Labatt, sec. 259, etc.) 

This principle was applied to the relations of master and servant in 
the case of Dynen v. Leach (26 L. J. Exch. N. S., 221) in 1857, and 
also in Saxton v. Hawkesworth (26 L. T. N. S., 851) in 1872, in such 
a manner that it was made to operate as a defense against a claim by 
the servant for damages for injuries resulting from "negligence 
actually existing" on the part of his master, on the theory that the 
servant had voluntarily agreed to encounter the risks from nonful- 
fillment of his master's legal duty as to system and appliances. 

At the time of these early cases cited the voluntary agreement of 
the servant was implied from his continuing in the service of the em- 
ployer, "with knowledge of the defects," so that if the servant re- 
mained in the service, with knowledge, he was debarred thereby from 
maintaining any action for recovery from the master for injuries 
resulting from such defects. 

DOCTRINE OF VOLENTI NON FIT INJURIA. 

This old defense of assumed risk, enumerated as a defense peculiar 
to the relation of master and servant, has been thought by some 
authorities to be only a form of the wider and more comprehensive 
doctrine of " volenti non fit injuria" of the common law, which means 
that "one who voluntarily incurs a risk can not recover." The latter 
has, by other authorities, however, been stated to be different from the 
doctrine of assumed risk, as the doctrine of assumed risk arises out 
of the contract of service between master and servant, while the 
doctrine volenti non fit injuria is a general principle applicable 
whether the relation of master and servant exists or not. (Thomas 
v. Quartermaine, L. R. 18 Q. B. Div., 685; 56 L. J. Q. B. N. S., 340. 
See Labatt, sec. 370, note.) 

This doctrine of volenti non fit injuria was thought not to be a hard- 
ship on the servant in the same sense as were the fellow servant doc- 
trine and the assumed risk doctrine, as it was common to the whole 
law of negligence and would be a good defense to a stranger's action 
against the master for damages for injuries resulting from negligence. 

CONTRIBUTORY NEGLIGENCE. 

The doctrine of contributory negligence was another defense against 
claims for damages for injuries resulting from negligence and, in very 
many instances, defeated a workman's claim against his employer. 
It is sometimes stated thus: "A plaintiff can not recover damages 
if but for his own negligence the accident would not have happened, 
though there was negligence on the part of the defendant." This was 



8 workmen's compensation. 

also recognized by Lord Abinger in Priestly v. Fowler (supra), and 
applied to a master and servant case, when he laid down that "the 
relation of master and servant can not imply an obligation on the 
part of the master to take more care of the servant than he may be 
reasonably expected to do of himself," thereby recognizing that the 
servant's right to recovery for an accident was conditioned on his 
showing that he did not contribute to his own injury. (See Labatt, 
sec. 313.) This defense, however, was available against the claim of 
a stranger as well as against the claim of a workman upon his employer. 
It was based upon the idea that if the plaintiff was negligent, his neg- 
ligence and not that of the defendant was the real or proximate 
cause of the injury. (Thomas v. Quartermaine, supra.) 

This doctrine was never accepted as sound in the admiralty courts, 
where, if both parties were negligent, the loss was divided. 

EFFECT OF DEATH UPON PERSONAL ACTIONS. 

Another defense that operated to defeat a workman's claim was the 
rule of the common law that every personal action dies with the per- 
son entitled to bring it, or on the death of the person against whom it 
can be brought (actio personalis moritur cum persona) . This rule of 
the common law, which relieved an employer from responsibility for 
all injuries causing death, was, however, abrogated by parliamentary 
enactment in 1846, under the statute commonly called "Lord Camp- 
bell's Act." Until that act the representatives of a workman killed 
by accident had no redress whatever against his employer. 

BURDEN OF PROOF ON PLAINTIFF. 

A final stumbling block to recovery by an injured workman lay in 
the fact that at common law in an action for damages for injuries 
resulting from negligence the burden of proof lies upon the plaintiff. 
He has to show (1) negligence, namely, a duty and a breach of that 
duty; and (2) injury as a consequence of that breach. In many cases, 
therefore, even where a workman had a legal right of recovery he got 
nothing, as he was unable to prove his case. 

Attempted Legislation, 1875 to 1879. 

An examination of attempted legislation and legislative enactments 
shows that bills were introduced in 1875 and 1876 to abolish entirely 
the doctrine of common employment and the defense of assumed risk. 
These bills were doubtless introduced because the principles so laid 
down were being pressed more and more severely against the work- 
men until the restrictions which were conceivably equitable to apply 
in the case of the smaller industries of former years were made to apply 
in the case of more recent and indefinitely extended undertakings. 
Thus the doctrine of common employment was applied to the slight 
relationship existing between a miner and the engineer of the mine 
and between the general manager of a railway and a trackman in the 
service of the same company, resulting in the master in a large under- 
taking escaping responsibility by delegating authority. These bills 
were withdrawn, however, on the undertaking that Lord Beacons- 



workmen's compensation. 9 

field, who was the prime minister, should cause an inquiry to be made 
into the subject by a select committee of Parliament. 

This committee was duly appointed, and in 1877 submitted a report. 

This report recommended that where a master delegates his duty 
of selecting proper servants, material, and plant wholly to agents, 
instead of performing them himself, such persons to whom those 
duties are delegated should be held to be the " alter ego" of the mas- 
ter, and not to be fellow servants of the injured servant. 

During the proceedings of the committee, before the adoption of the 
report, it had been proposed that the committee recommend that the 
defense of common employment should be abolished in the case of 
accident through the negligence of any employee exercising author- 
ity, however low in the scale he might be, so long as he was not 
employed in actual manual labor. This recommendation, however, 
was rejected in favor of the report above given. 

About the same time a report from the royal commission on acci- 
dents on railways was brought in, to the effect that the master should 
be made liable for damages for injuries resulting from the negligence of 
those to whom the master's authority had been delegated on railways. 

The following year, 1878, one of the bills to totally abolish the doc- 
trine of common employment was reintroduced. It, however, was 
''talked out," and then dropped. The attorney general, however, 
promised to bring up a bill later. It was then contended that there 
was no difference between railways and other industries. 

In 1879 three bills were introduced, none of which passed. Of these 
one proposed to abolish the doctrine of common employment and the 
other two to modify that doctrine. One of the latter was introduced 
by the Government and was limited in its operation to "railways, 
mines, factories, and works." It made the employer liable for dam- 
ages for injuries resulting from the negligence of servants with 
"managerial" authority; it failed to pass, as there was a dissolution 
of the Government before it had left committee. 

Employers' Liability Act of 1880. 

In the following year, 1880, a bill was introduced by Mr. Gladstone's 
Government, which was finally enacted into law and became known 
as the "employers' liability act of 1880." At the general election, 
following the dissolution of Lord Beaconsfield's Government, the 
abolition of the doctrine of common employment became an election 
cry. Theiefoie, at the entry of the next Government Mr. Gladstone 
said: "The present law is unsatisfactory, and further protection to 
workmen is necessary," and immediately reintroduced the bill intro- 
duced by Lord Brassey in 1879. Mr. Dobson, whose name was on 
the back of the bill, showed in his statement that "the common law 
had ended in giving the workmen no compensation at all unless he 
could trace the accident to personal negligence on the part of his 
employer." He stated that the bill reverted to the ancient state of 
the law and would take a middle course, making the employer liable 
for injuries resulting from the negligence of those to whom he deputed 
his duties, or from defects in the plant due to negligence of his dep- 
uties. 

Many amendments, which became interesting from their frequent 
reappearances in later Parliaments, were introduced. One provided 



10 workmen's compensation. 

for a general system of insurance, and though this amendment was 
negatived the Government said that while they did not deem com- 
pulsory insurance practicable, they would consider proposals thereto. 
Another amendment, which was negatived, allowed a workman to 
recover, if injured by a fellow servant, "in a separate department." 
An amendment to extend the benefits of the bill to Her Majesty's 
arsenals and dockyards was negatived on the ground that they now 
had greater benefits, although it was said that the Government 
employees would ultimately be treated the same as others. It was 
claimed by the opponents of the bill that if passed it would result in 
the ruin of industries. Mr. Chamberlain strenuously denied this in 
debate. 

When the bill became a law it was restricted to a limit of seven years, 
but it was subsequently extended, year by year, until the passage of 
the workmen's compensation act of 1897, and is still in force. It, 
however, imposed a limit upon the amount of damages (previously 
unlimited at common law) that could be recovered for an accident, 
namely, u three years' wages of the injured person, or of a person in 
the same grade in the same district." This limitation has operated 
as a hardship upon injured children, since their earnings were usually 
only a few shillings weekly. 

The act being a compromise, was imperfectly drawn, and resulted 
"in a large crop of litigation." 

While in introducing the bill the Government had intended to bring 
back the law to what it was supposed to be in England before the case 
of Priestly v. Fowler, and in Scotland up to tne decision in the Barton- 
shall Coal Co. v. Reed (3 McQ., H. L. Cas., 266), the result of the act 
was to prima facie entitle the workman to recovery for injuries result- 
ing from the negligent performance of master's duties and powers 
delegated to superintendents and to other persons. It, therefore, 
only obliterated the doctrine of common employment, as far as the 
five causes of injury to a workman mentioned in section 1 of the act 
was concerned. That doctrine, therefore, remained in force as to 
accidents from other causes than those mentioned in section 1 of the 
act, but placed the workman in the same position as if he had been a 
stranger to his employer, so far as the five causes mentioned in that 
section were concerned. The five causes mentioned were as follows: 

(1) Defective ways, works, machinery, and plant (if due to the 
negligence of the employer or of the person to whom had been dele- 
gated his duty thereabout). 

(2) Negligence of a superintendent (if superintendence was his 
principal duty and he was not ordinarily engaged in manual labor). 

(3) Negligence of persons to whom the employer had delegated Iris 
power of giving orders. 

(4) Acts or omissions in obedience to rules or by-laws or in obe- 
dience to instructions of persons authorized by employers to give 
them. 

(5) In the case of railway companies, the negligent management of 
trains, points, and signals. 

The act was also at first thought to have taken away the defense of 
volenti non fit injuria (see Weblin v. Ballard, 17 Q. B. D., 125); how- 
ever, the later leading case of Thomas v. Quartermaine, supra, 
showed that this defense still survived, although the subsequent case 
of Smith v. Baker (60 L. J. Q. B., 683), in the House of Lords, mini- 
mizes its application. 



workmen's compensation. 11 

Contracting Out. 

After the passage of the employers' liability act of 1880 it was found 
that employers were, by special contracts with their men, freeing them- 
selves from the liability imposed by that act, and the case of Griffiths 
v. Earl Dudley (9 Q. B. D., 357) decided that such contracts were 
"not contrary to public policy." Therefore, in 1881, a bill was intro- 
duced to prevent an employer from contracting himself out of the 
act. The bill failed, and in the following years, 1882 and 1883, 
similar bills again failed. It was stated that "it was inexpedient to 
interfere with freedom of contract and with private schemes that made 
provision for every accident, whether under the employers' liability 
act or not." In 1886 a similar bill contained a further clause that the 
definition of a person intrusted with superintendence was not there- 
after to be limited to "one who is not ordinarily engaged in manual 
labor and whose principal duty is that of superintendence." The 
bill was dropped on the appointment of a select committee to inquire 
into the workings of the act of 1880. 

The committee's recommendations were as follows: 

(1) The repeal of the "limiting definition" of a superintendent. 

(2) That no contracting out should be allowed, unless for adequate 
consideration (namely, a contribution to insurance approved by out- 
side authority and guaranteed against deficiency by the employer). 

In 1887-88 a bill was introduced by a labor member practically 
abrogating the doctrine of common employment, and while not affect- 
ing existing "contracts out," providing that in future there should 
be none, but that the "court in any suit" should "reduce the damage" 
if it was found the plaintiff had received benefits from insurance 
funds. The bill was dropped on the Government itself introducing a 
bill on the lines of the select committee's recommendations. That 
bill was emasculated in committee, and thereafter dropped on oppo- 
sition by labor members, who insisted on abolishing the defense of 
common employment and contracting out. 

In 1890 another bill was introduced by a labor member abolishing 
common employment as a defense, and repealing the act of 1880. 
But the Government again reintroduced its bill, allowing contracting 
out only when "a written request was made by a workman," and even 
then allowing the court, in any subsequent suit, to pass on the ques- 
tion of the adequacy of consideration received by him for so doing, 
and to see that it was a substantial one, other than "continuance in 
service." 

The following year a labor member introduced a bill, which did 
not pass, entirely prohibiting contracting out, and actually invali- 
dating all such existing contracts. 

It will, therefore, be seen that the Government was on the horns of a 
dilemma: 

On the one hand, it was shown that from the workmen's standpoint 
there seemed to be no equitable reason for the distinction of the exist- 
ing law between accidents, the result of negligence, traced to a supe- 
rior servant, and accidents traced to an inferior servant, the neglect 
of one being as liable to cause an accident as the neglect of the other, 
or for the Taw treating workmen less liberally than strangers, even 
where the accident was caused by an inferior servant. Again, if a 
distinction were maintained making "mere authority" on the part 



12 WORKMEN 's COMPENSATION. 

of the offending servant the test, it would still be unjust and would 
practically amount to no distinction at all. The elimination, there- 
fore, of the distinction by abolition of the doctrine of common employ- 
ment was put forward as one remedy. 

On the other hand, the only other remedy would have been to 
change the general law by taking away from the master his liability 
to anyone, to a stranger as well as to a servant, for his servant's 
acts. This would have caused altogether too great an upheaval of 
general legal relations, and probably could not have been enacted, 
owing to opposition not only by the workmen interest but also by 
the public interest. 

The difficulties that confronted the Government, if they permitted 
contracting out, were: 

(1) Examination of adequacy of contracting-out schemes before- 
hand would necessitate a Government department. 

(2) To allow the adequacy of contracting-out schemes to be passed 
on by a court in suits would take from the employers "the preven- 
tion of suit feature," their chief incentive to contract out. 

The Government found, on inquiring into how far contracting 
out had been carried, since the act of 1880, that as regards mines, 
a very large number did contract out, and desired to; in railways 
contracting out was general; in the building trades, the iron trades, 
and other trades, there was generally no contracting out. 

Among the reasons advanced for prohibiting contracting out 
were: 

(1) That the act tends to safety through exposing negligent em- 
ployers in court. But the Government found the number of cases 
in court were insignificant, and from such statistics as were available 
concluded that the claim was not borne out. 

(2) That if allowed to contract out, workmen will be coerced to 
contract out for no consideration. The Government found practi- 
cally no such cases, and also found that employers' contributions to 
benefit societies under contracting-out schemes exceeded vastly the 
amount payable under the act. 

The contracting-out schemes covered all accidents, both those 
for which the master could be held liable and those for which the 
master could not be held liable. They seemed to work advantage- 
ously to both parties, the workmen getting larger pecuniary benefits 
for every accident, and also having an incentive to insure, while 
the master was freed from suit and was placed on better terms with 
his men. Therefore it was felt that an absolute prohibition of con- 
tracting out would be disadvantageous to both parties. 

Attitude of Political Economists. 

The Government had before it, on the one hand, the view of law- 
yers, employers, and workmen, who argued as if there was then 
practically no indemnity recoverable for accident, and further that 
abolishing the doctrine of common employment would give such an 
indemnity, but that contracting out, if allowed, would take it away 
again. 

On the other hand was the view, from the political-economy stand- 
point, which admitted that industry ought to bear the cost of all 
accidents (as risks as well as labor should be paid for), but maintained- 



workmen's compensation. 13 

that it actually did so, in whatever state of the law, in a fractional 
reduction of the current rate of wages which the employer took from 
the men and ultimately paid back to them in occasional damages 
recovered against him for accidents. Political economy was not, 
therefore, concerned with such changes, since, if the law were made 
more drastic by abolishing common employment, a slightly larger 
amount would be retained by the employer from the wages, and if 
contracting out were permitted again a less amount would be retained 
by him. 

The political economists' view was, therefore, that there was no 
sound economic reason for making distinctions between accidents 
which were the result of negligence and pure accidents; that all 
accidents might be properly compensated; that it merely made the 
employer an insurer, who took the premiums from the wages in a 
greater or less degree, and that it was only a political and not an eco- 
nomic question. 

The Asquith Bill, 

In 1893, the Liberal Government, then in power, through the Home 
Secretary, Mr. Asquith, introduced a bill to amend the existing em- 
ployers' liability law. This bill provided for the repeal of the act 
of 1880 and for the abolition of the doctrine of common employment 
entirely and the limit of damages recoverable ; it prohibited contract- 
ing out entirely. Though it did not take away the defense of con- 
tributory negligence and acquiescence (volenti non fit injuria), it 
left the servant in the same position as a stranger, thus practically 
going to the limit of previous contemplated legislation. 

At once, on the introduction of this bill, Mr. Chamberlain, who was 
a member of the opposition (the Conservative Party), introduced an 
amendment to the effect that no change of the law "will be final or 
satisfactory which does not provide compensation for all injuries in 
the ordinary course of employment not caused by injured's own act 
or default." The departure eliminated the question of whether the 
master was negligent or not. 

The attitude toward industrial accidents as expressed in this 
amendment had for some time past found expression in legislation 
in Germany and Austria, as well as in other European countries. 
There the basis of recovery for accidents had been changed from that 
of the general common law of negligence to the principle that "work- 
men should receive certain compensation, but limited in amount, for 
all accidents of industry," irrespective of whether negligence attribu- 
table to the master caused them or not; contracting out was pro- 
hibited. In one country (Germany), as a machinery for carrying 
this out, a general system of insurance had been adopted, the indus- 
tries of equal degree of danger being formed into mutual insurance 
guilds. 

A second bill was therefore introduced by private members making 
the employer liable to pay "compensation for all injuries due to 
employment," excepting the willful default of the injured workman, 
placing limits on such compensation, however, and providing that it 
should take the form of purchase of annuities from the post office of 
the amounts specified in the schedule of the bill. This bill was only 
tentative, and was withdrawn, as was Mr. Chamberlain's amend- 
ment to the Asquith bill. 



14 workmen's compensation. 

principle of the bill. 

Mr. Asquith, in debate of the Government bill, said the principle of 
it was exactly similar to the act of 1880, namely, that "if a man, for 
his own profit, sets on foot industrial operations, he ought to be 
made responsible for the selection of his servants and the supervi- 
sion of his business, so as to reduce the risks to the smallest possible 
number," and that this bill would diminish the area of accidents. 
The opposition pointed out that masters could not control the acts 
of the fellow servants. 

After lengthy debate throughout the session and the introduction 
of a new clause dealing with employments injurious to health, the 
Government bill passed the House of Commons. 

In the House of Lords an amendment, passed by 148 votes to 28 
(known as the Dudley amendment), permitted the continuance of 
existing contracts out, if subsequently approved by a two-thirds vote 
of the men, and future contracts out on the granting of a certificate 
by the board of trade "that the scheme compensates all cases of 
injury, that the employer contributes at least one-fourth, and that 
an actuary certifies that contributions are proportionate to the lia- 
bilities of the fund." 

On the House of Lords refusing to eliminate their amendment and 
concede the unrestricted prohibition of contracting out, on the ground 
that the workmen were opposed to the prohibition and that it would 
minimize the prevention of accident feature of the bill, the House of 
Commons rejected the amendment and threw up the whole bill. 

It will be seen that the attitude in England toward the subject of 
industrial accidents and the law in force there at the time of the 
failure of the Asquith bill, corresponded very closely to the attitude 
toward the subject and to the laws in force in the United States 
to-day, with the exception that verdicts higher in amount are ren- 
dered here by juries. The law in England then was the common 
law of negligence, subject to the defenses of contributory negligence, 
assumption of risk, and fellow-servant negligence, as modified by the 
employers' liability act of 1880. The legislation attempted indicated 
clearly the tendency of public opinion toward trade compensation 
for accident irrespective of negligence. In the United States the 
existing law is the same common law of negligence, subject to the 
same defenses of contributory negligence, assumption of risk, and 
fellow-servant negligence, as modified in some States by similar 
employers' liability acts, and in others by a more limited interpreta- 
tion of the defense of fellow-servant negligence. In the United 
States, as then in England, in certain States (as in Massachusetts) 
there have been suggested changes to laws of compensation irre- 
spective of negligence. 



WORKMEN'S COMPENSATION ACT OF 1897. 

Arguments Advanced When the British Workmen's Compen- 
sation Acts Were Adopted. 

principle of the bill. 

The next serious attempt to deal with the subject of accidents 
to workmen was the introduction by the Conservative Government 
of a bill which became the workmen's compensation act of 1897. 
The Government in introducing the bill said: "The present law is 
notoriously inadequate; it fails to compensate for accidents if caused 
by fellow servants, if contributed to by the injured, and if resulting 
from the risks of occupation; it causes costly litigation, 35 per cent 
of the amount recovered being legal expenses ; it leaves the employer 
ignorant of what his liability is." 

The Home Secretary said that the Asquith bill had attempted the 
prevention of accidents by making the master responsible for acci- 
dents from the negligence of fellow workmen, as well as from his 
own, and without limiting the amount of damage, putting the work- 
men in the same position as strangers ; that such legislation rendered 
proof of negligence necessary, which meant increased litigation, and 
such a law would still reach only 50 per cent of the accidents that 
happened. 

The Government held that giving a right of 'action for injuries 
resulting from negligence could not adequately meet the serious 
results of accidents to workmen, that they should be put in a better 
position toward their employers than a stranger and be given a cer- 
tain but limited compensation for all accidents, not at the expense 
of taxes or public charity, and that this would tend to prevent acci- 
dent, though the true method of prevention was by criminal statutes. 

The Government said the purpose of their bill was to define and 
limit the liability and devise a simple and inexpensive method of 
settling doubtful questions. That the principle was new, based on 
the doctrine that "When a person on his own responsibility and for 
his own profit sets in motion agencies which create risks for others, 
he ought to be civilly responsible for the consequences," but in 
applying this and granting compensation it was the general opinion 
that a limit of liability should be adopted with it. 

The opposition (Mr. Asquith) admitted the principle of universal 
compensation and of giving "some solatium for a pure accident, the 
result of no negligence, to soldiers in the army of industry." He said 
it was revolting to sentiment and judgment that "men who met with 
accidents through the necessary exigencies of daily occupation should 
be a charge upon their own families," and though the bill created a 
new legal right, so did the poor law, which recognized everyone's 
right to State food and shelter. He, however, criticized the bill as 
drawn. 

15 



16 workmen's compensation. 

arguments for and against the bill. 

The following are the leading arguments, pro and con, of the 
extended debates that followed, grouped under their respective heads, 
and referred to the different provisions of the bill. 

By its opponents the bill was called "a radical revolution" and "a 
plunge into socialism. " It was said to exceed the proper function of 
government, which was the protection of property and liberty, trans- 
ferring the burden of accidents from one set of people to another; it 
was said to put legal responsibility where no moral responsibility 
existed, and to be contrary to the tenets of the Conservative Party 
introducing it. 

This was answered by Mr. Chamberlain, the author of the bill, who 
admitted that it was a new principle, only applicable if a " great public 
human interest is involved," but said that the bill dealt with "a 
great scandal"; not with absolute rights, but with questions of 
humanity and expediency. He stated that it contained two principles 
as follows : 

(1) That a workman was entitled for all accidents of occupation to 
a moderate and reasonable compensation. 

(2) That the compensation should be a charge on the trade, like 
repair of machinery. 

He said, moreover, that the bill distinguished between an em- 
ployer's moral negligence (employer's willful or wrongful act) and an 
employer's technical negligence (his foreman causing an accident) and 
an employer's criminal negligence (employer's neglect of precaution 
after warning) . 

Mr. Balfour (afterwards prime minister) said that the bill was con- 
sistent with previous legislation, the country felt it desirable to 
11 diffuse the shock" of accidents, and had already granted such a 
relief to the public, and it should be granted to a workman in his voca- 
tion. He answered the objection that it put a legal where no moral 
responsibility existed by showing that the law already did that, as it 
made a railroad responsible for an injur}' to a passenger, even where 
caused by the mistake of a good engineer. 

Lord Salisbury (the prime minister) said that the existing law was 
socialistic and not the bill, since the existing law made the taxpayer 
through the poor law pay for a railroad engineer killed by an outsider 
obstructing the track, and so transferring the burden to the industry 
itself (the railroad) was less socialistic. 

He said that there was a proper distinction between State inter- 
ference when saving life as against saving property; that in no well- 
regulated State was mere liberty allowed to endanger lives; that it 
was the supreme duty of the State to see that the claims of property 
must bow to the interest of citizens represented by safety, life, and 
limb. He added that the bill was part of the series of old factory 
legislation preventing disease and death. He said the history of the 
law of compensation was a history of a great machinery for saving 
life. 

The following objections to the bill and answers to these objections 
were also made: 

(1) That it was unfair, as it made the employer liable for acts of 
strangers, and as a social experiment, if it was expedient for the 
country, the country should pay for it; but it was answered that it 



workmen's compensation. 17 

was "fair, moral, and right"; that those for whose emoluments the 
trade was carried on should pay; that as the employer risked only his 
capital, but the workman his life, he had a right to compensation when 
injured at his employment ; that wear and tear should be borne by the 
industry ; that a maximum of one-half wages lost was fair. 

(2) That the German system was better, as under it trade respon- 
sibility existed, as opposed to individual responsibility under the 
bill, and that the State should insure or assume the pensions; but 
Mr. Chamberlain answered that the German system was too elaborate 
and was impossible for English people, and that State insurance was 
a gigantic question. 

(3) That it would cause social strife, as it was alleged the German 
law had done; but its advocates maintained that it would insure 
social peace and diminish litigation, as they alleged the German law 
had done. 

(4) That the trades unions and friendly societies would suffer 
through it; but this was denied by the labor union members. 

(5) That it would take away self-reliance and thrift from the work- 
man; but it was said that individualistic theories about the rights 
and habits of grown men had become obsolete. 

(6) That it would reduce wages; but this was not admitted. 

(7) That it would increase accidents, as it was alleged the German 
law had done; but this was denied. 

(8) That it would injure old men, as employers would not employ 
them; but (though the Government was willing to limit the provi- 
sions of the bill to men under 60 years) this was strenuously denied 
by the representatives of labor, who said older men were more careful. 

(9) That it was illogical, as it excluded health. The Government 
admitted this, but said that health was too large a question to tack 
onto it. 

(10) That it would injure trade, especially export trade, and that 
the bill taxed industry; but it was answered that the employers' 
liability act of 1880 had been said to impose " terrible liabilities on 
trade/ 7 which experience had shown to be unsound. 

Mr. Chamberlain said the Asquith bill was a punishment bill cov- 
ering 10 per cent of accidents and this bill was a benefit bill covering 
80 per cent of accidents. 

Other members admitted it would relieve poverty, distress, and 
ruin to thousands of workmen through accidents. 

Mr. Ruegg, a leading English commentator on this subject, states 
the principle of the bill to be that "the pecuniary results from loss of 
life and injury incident to the carrying on of industrial enterprise" 
should be regarded as "a part of the expense of production;" that 
the employer who initiates it should, for convenience sake, pay this 
expense in the first instance, and that "ultimately it will be paid by 
the community" for whose use and enjoyment industry is carried on. 

SCOPE OF THE BILL. 

The act of 1897 is limited in its application to employment on or 
in or about a railway, factory, mine, quarry, or engineering work, 
and a building which exceeds 30 feet in height being constructed or 
repaired by means of a scaffolding, or being demolished, or on which 

S. Doc. 618, 62-2 2 



18 workmen's compensation. 

machinery driven by power is being used for those purposes. (Sec. 
7 (1).) The act of 1900 added agriculture. 

The scope of the act of 1897 was criticised generally as being too 
exclusive and covering only selected industries; as failing to cover 
large classes of workmen, such as seamen, agricultural laborers, 
employees in workshops (factories without mechanical power), and 
other small employers' work people ; as only partially covering build- 
ing employees ; as failing to cover the first two weeks' disability from 
accident; as failing to cover injuries to health; and as covering trades 
like coal mining, which would be ruined by the bill. 

Generally, the Government said that the bill was a tentative meas- 
ure, and as it involved a new principle it was limited to the more 
dangerous industries, i. e., to those which had the most accidents; 
that it covered 6,000,000 work people (leaving 7,000,000 unpro- 
tected), but it had covered 60 or 70 per cent of all accidents; that 
the two exceptions to liability were serious and willful misconduct 
on the part of the injured employee (sec. 1 (2) (c) ) and the exemp- 
tion of employers from liability for the first two weeks of accidents 
(sec. 1 (2) (a) ), which would foster benefit societies and knock off 
25 per cent of accidents (which were trivial) and 30 per cent of the 
compensation payable; that injury to health was too large a question 
to add to this. 

In discussion, Mr. Balfour indicated that a reason for omitting 
small employers and selecting the great organized trades was to 
obviate what would be merely transferring the ' 'shock of accident" 
from one individual to another, the shock being diffused if applied 
to the great organized trades. It was admitted that when experience 
had proved there was no injury to the trades covered, such experi- 
ence would be an unanswerable argument in favor of the extension 
of the scope of the bill. 

In debate it was said that there were three tests of the scope: (1) 
Risk, (2) capital in industry, (3) insurance feasibility. 

SEAMEN. 

The arguments against inclusion of seamen, presented by Mr. 
Chamberlain, were that shipping was a great industry of "special 
circumstanes," and therefore separate legislation was necessary; 
that the great steamship lines were different from the merchant 
service ; that the inclusion of seamen under the bill would breed oppo- 
sition; that already injured sailors were paid their wages and medi- 
cal attention according to special laws. It was said that deaths on 
sailing vessels were 50 to 1 of deaths on steamers; that it would kill 
the sailing-vessel industry and the fishing business to include them; 
that the owner had no control over accidents at sea. Several owners 
in big steamship lines recommended inclusion, and Mr. Havelock 
Wilson (who had fought to have the act of 1880 applied to sailors, 
but failed) pointed out, as to payment of wages when a seaman was 
injured, that there was no loss to the owner, as the other sailors did 
the injured sailor's work; that shipowners paid no poor-rate tax, 
and therefore "landsmen paid for injured sailors;" that there was 
no medical attention supplied, except in the big liners; that the trade 
was a most dangerous one. 



workmen's compensation. 19 



WORKSHOPS. 



It was urged that women and children were employed in work- 
shops, that there were no "compassionate allowances" in workshops; 
and that the tendency of modern legislation was to unite workshop 
and factory; but it was answered that they were not dangerous, the 
proportion being only 2 deaths in workshops to 188 in factories. 



BUILDINGS. 



The Government refused to eliminate the restriction and cover 
buildings under 30 feet in height, saying that the inclusion of build- 
ings was a compromise, and that 30 feet was an arbitrary line, 
based on the factory act. 



GOVERNMENT EMPLOYEES. 



Persons in the naval and military service of the Crown were 
excluded (sec. 8) ; otherwise Government employees were covered. 



MALINGERING. 



It had been claimed by the opponents of the bill that the German 
law had increased malingering on the part of injured workmen, and 
that this bill would have the same effect, but the Government felt 
that these provisions for medical examination would prevent it, and, 
further, that cooperative schemes formed under the contracting-out 
clause, as they would be controlled by workmen, would also prevent it. 



ACTS OP STRANGERS. 



In reply to the criticism that the bill was unjust in making an 
employer responsible for injuries to his men caused by acts of 
strangers, the answer was made that all employers with their fellow- 
men in their power through industry should "be forced to make them 
safe." The Government said if the employer was not made liable 
it would necessitate the inquiry, "Who caused the accident?" and 
result in litigation, defeating the object of the bill, which was to 
compensate without inquiry. With a view to this principle, and 
chiefly to include under it subcontractors' workmen (sec. 4) as em- 
ployees of the chief employer, so enabling them to get their benefits, 
section 7 (1) provides that "the act shall apply only to employment 
by the undertakers," though in all cases except those in section 4, 
the injured' s own employer is the undertaker (sec. 7) ; (2) defining 
the undertaker as "the company" in a railway, "the occupier" in a 
factory, quarry, or laundry, "the owner" in a mine, "the person 
undertaking the construction, etc.," in engineering work and in 
building. Section 4, however, gives the undertaker a right of in- 
demnity against the subcontractor. 



COAL MINING. 



It was urged that 80 to 90 per cent of the coal in Northumberland 
competed with foreign coal, and that, therefore, employers could 
not transfer the burden to the foreign consumer; that any raise in 



20 workmen's compensation. 

the price would destroy the glass trade and injure the steel trade; 
that the bill would shut down a number of coal mines. The Govern- 
ment answered that foreign competitors had compensation laws. 

AGRICULTURAL LABORERS. 

It was urged that agricultural laborers should be covered, as 
accidents occurred from agricultural machinery, and their poor 
wages did not enable them to insure; that they presented the most 
pathetic figure in the social system — a life of unremitting toil, fol- 
lowed by the poorhouse in old age. The Government in 1897, said the 
bill was only tentative, and agriculture was not a dangerous trade. 
They did, however, by a separate bill in 1900, include agriculture, 
which covers horticulture, forestry, husbandry, inclusive of keeping 
live stock, poultry, or bees, and the growth of fruit or vegetables. 

PREVENTION OF ACCIDENTS. 

The Asquith bill had been put forward as effecting the prevention 
of accidents, and his party urged that this bill would not prevent 
accidents; that the criminal law was ineffectual to prevent them; 
that there was nothing incompatible in granting universal compensa- 
tion, and at the same time providing special liabilities for preventable 
accidents; that the German system provided compensation with pre- 
vention under its danger schedule; that in Germany the trades had 
a remedy against a negligent employer; that under this bill there 
would be insurance, and .that insurance deprived the master of 
incentive to care. 

It was answered that the Asquith bill only made the master 
responsible in a greater number of accidents than the preexisting 
law, and that the master could not prevent the accidents caused 
by fellow servants, by which only that bill increased his responsi- 
bility; that this bill covered a still greater number of accidents than 
the Asquith bill, and so was more powerful than it to prevent ac- 
cidents; that increased responsibility meant increased care; that the 
employers' financial responsibility was a greater preventive than 
State financial responsibility; that the true method of prevention 
was by criminal enactment, by factory and workshop acts, and other 
health and safety acts, and that section 1 (5) of the bill made special 
reference to the fines applied for the benefit of the injured workmen, 
and provided that the act should in no way restrict proceedings for 
such fines. In regard to insurance, it was stated that employers had 
always been able to insure ; that want of care would affect employers ' 
pockets, as insurance companies would differentiate rates; that they 
saw to it that machines were well guarded; that it was cheaper, 
however, not to insure at all, which was feasible now that compensa- 
tion was definite and limited. 

BURDEN IMPOSED BY BILL. 

On the question as to where the burden imposed by the bill would 
and should fall, Mr. Asquith said that in trades with foreign com- 
petition it could not be transferred to the consumer, but that it 
would fall on the employer and workman, with consequent injury 



workmen's compensation, 21 

to the small employer. To prevent the latter happening and to 
insure the workman getting his benefits, he advocated placing it on 
the trade as a whole, as in Germany, and, to prevent injury to the 
trades with foreign competition, he suggested placing the burden of 
the bill on the community as a whole. He admitted it would not be 
crushing to industries generally, and that it would be perfectly fair 
even if the burden fell on wages. 

Other members said that small employer was being crushed out of 
existence and advocated some Government scheme of insurance, as 
well for small employers as for trades with foreign competition, like the 
coal trade, which would be ruined, because they could not stand the 
burden. The foreigners now (though they already had accident- 
compensation laws) were winning in competition. They also said that 
mine owners would run the risk themselves of bankruptcy through a 
mine disaster, since rates of insurance would be so heavy to cover 
them. It was no help to a mine owner with an explosion costing 
£80,000 ($389,320) on his hands to be told that the average cost was 
1 per cent. 

Mr. Chamberlain answered that the cost fell ultimately on the con- 
sumer; that it would not be a burden on wages, but would become a 
part of charges, which in foreign countries were called trade charges 
as much as fire insurance, and an addition to the cost of raw material; 
that the price of wages was settled by the supply of labor and not by 
these charges unless it could be shown that every business charge 
became a charge on wages; that wages in Germany had advanced. 
He characterized the cry of ruining trades as ridiculous and said that 
generous employers already made similar contributions, and they 
were glad their competitors were to be brought up to their level. 

The attorney general said the main criticism, " that the cost would 
be 2d. (4 cents) a ton on coal," meant that the cost would only be 10 
to 20 per cent more than the Asquith bill and that catastrophes, like 
explosions, were not arguable; that the bill covered everyday 
accidents. 

Mr. Broadhurst, who had taken a keen interest in labor matters as 
a member for 20 years, said that a great principle had been established 
by the bill; but there was "no answer to where the burden would fall." 
Sir Edward Clark said the burden would fall first on the employer; 
second, on the consumer; and, third, on wages, which was fair. It 
was believed that it would only fall on wages when the bottom price 
in foreign markets had been reached. 

It was pointed out that the income tax showed an industrial profit 
of £336,000,000 ($1,635,144,000), so that industry could well bear the 
bill; that the fears of coal owners in 1860, 1872, and 1877 had not been 
borne out by subsequent facts; that the bill, in reality, was not a 
serious burden, as improving the conditions of labor by shortening 
hours, etc., always benefited a trade; that the charitable donations of 
employers, who voluntarily did as much now, would be saved. 

COST OF THE BILL. 

The cost of the bill to the trades involved was urged as the strongest 
argument against it. Mr. Chamberlain believed that on the basis of 
the Government experience, 1 per cent on the wages in coal mining 
would cover the cost, and one-fourth of 1 per cent in factories, less the 



22 workmen's compensation. 

cost of present charitable payments, and the cost of the employers' 
liability act of 1880 and that in textile trades, one-twentieth to one- 
tenth of 1 per cent would be sufficient. 

Other estimates advanced showed that the existing English law cost 
one-eighth to one-fourth of 1 per cent, while for the Asquith bill the 
cost would have been one-half of 1 per cent and that the cost would 
be three-fourths of 1 per cent if this bill passed. 

One member, an employer in a large engineering firm, said that 
examination of his experiem e for 10 years past showed that the result 
of the bill would be one-eighth of 1 per cent on his wages, and another 
member, the head of another large engineering firm (also manufactur- 
ing iron and steel), reached precisely the same result. Still another 
member gave figures of one-third of 1 per cent for a trade involving 
15,000 men. 

COAL. 

• 

On the figures of the Cheshire Miners' Protective Relief Fund the 
result of practically 1 per cent of wages on coal was reached; but other 
estimates varied from two-thirds pence (1.35 cents) a ton (Prof. Meri- 
vale, Newcastle) to as high as 3d. (6 cents) a ton (Sir William Lewis, 
South Wales) and from 1 per cent on wages (Government) to 4| per 
cent on wages (Mr. Neison), and it was said that 2d. (4 cents) a ton 
would ruin the trade. The Government answered that Germany now 
paid 2 per cent, and Lord Salisbury pointed out that freights varied 
from 5s. lid. to 8s. 3d. ($1.44 to $2.01) a ton, so that 2d. (4 cents) a ton 
would be insignificant and only the equivalent of carrying 4 miles far- 
ther, as freight cost one-half pence (1 cent) a ton. 

BANKRUPTCY OF EMPLOYER. 

Bankruptcy of the employer might be caused by a disastrous acci- 
dent or might arise in the ordinary course of business. In the first 
event the workman would lose his benefits and in the latter any annu- 
ity he was receiving. 

To deal with the difficulty of bankruptcy of the employer, remedies 
were urged (1) making the whole particular trade responsible for acci- 
dents affecting each individual employer by compulsory masters' com- 
bination, like the German system ; (2) adopting compulsory insurance ; 
or, (3) inaugurating State insurance. It was answered that, though a 
hardship, the workman must take his chance; that bankruptcy was 
just as likely through an action for damages for injuries resulting from 
negligence as through this bill. 

An amendment to allow the substitution of an approved insurance 
for the liability under the bill was negatived, as the Government could 
not undertake to certify the solvency of insurace companies. 

To deal with the difficulty of losing annuities, the payment of lump 
sums instead of annuities was urged, it being pointed out that those 
sums could then be invested to produce an annuity. 

The Government later accepted amendments to make the under- 
taker liable to subcontractors' men (sec. 4) and giving workmen a lien 
on any insurance the master had if the master became insolvent (sec. 
5), but refused an amendment to make him a preferential creditor on 
the insolvent master's total assets. 



workmen's compensation. 23 

CHOICE OF REMEDIES AND LIABILITY OF EMPLOYER. 

The bill left a choice of remedies to the workmen — i. e., of claiming 
at his option under the bill or suing under the common law or under 
the employers' liability act of 1880 — but did not leave the employer 
liable to pay compensation both independently of and under the act. 
(Sec. 1 (2) (6).) 

It was the intention in passing the bill to restrict the workmen's 
rights at common law and under the employers' liability act of 1880 
somewhat in inserting the words " personal" and " willful" (personal 
negligence or willful act of the employer or of some person for whose 
act or default the employer is responsible). Mr. Asquith moved to 
omit those words and leave the old rights intact, but Mr. Chamber- 
lain, who had said the bill distinguished between "moral, technical, 
and criminal" negligence, refused to sanction the omission, saying 
the old remedies were only left for cases of moral negligence and 
liability — i. e., where there was deliberate and peculiar negligence 
corresponding to the serious and willful misconduct which defeated 
the claim of the workman. However, the words have not limited the 
previous rights to any extent. Mr. Ruegg, who discusses the point 
in his treatise, says: "None of the workmen's rights, either under the 
employers' liability act of 1880 or at common law, are taken away by 
the workmen's compensation act." As the act of 1880 also limited 
the compensation recoverable for death or disablement to three years' 
wages, Mr. Haldane said: "There would be no incentive to sue under 
it," and an amendment taking away the existing rights under that 
act and the common law, but also taking away the limits of com- 
pensation under the bill, was lost by only 24 votes. 

If a workman sued independently of the bill and lost his suit, sec- 
tion 1 (4) provided that he should not thereby lose his compensation 
under the bill, but the court should then and there on his request 
assess it, deducting the costs of suit therefrom, if justifiable, and give 
a certificate of it, which should be the equivalent of an award under 
the act. If he proceeded under the bill and failed through any tech- 
nicality he could not, however, subsequently sue. 

If a stranger was liable for the accident, section 6 gave the work- 
man the option of suing the stranger or of proceeding under the act, 
and, if he chose the latter course, gave the employer a remedy against 
the stranger for indemnity. 

DEFENSES OF FELLOW-SERVANT NEOLIGENCE AND ASSUMPTION OF 

RISK. 

Amendments to the bill were introduced to eliminate the defenses 
of fellow-servant negligence and assumption of risk. It was urged 
that these defenses still applied in the trades not covered by the bill 
if suit were brought independently of the bill, and also in the small 
injuries of less than two weeks' duration excluded by the bill. Mr. 
Chamberlain pointed out that the amendment would necessarily be 
limited in effect to the trades within the bill and that, so far as those 
trades were covered, the bill practically obliterated those doctrines 
and in no way defended them; that only a small part of the trivial 
injuries were traceable to the negligence of fellow servants. The 
amendments were lost. 



24 workmen's compensation. 

defense of contributory negligence. 

The question of eliminating the defense of contributory negligence 
was a difficult one. Mr. Chamberlain said that, morally, cases caused 
by the injured' s own negligence should not be compensated, but as a 
matter of expediency, to avoid litigation, they should be. 

The Government, however, later approved and passed an amend- 
ment to exclude payment for injury to a workman if it was the result 
of his " serious and willful misconduct" (sec. 1 (2) (c) ). Mr. Cham- 
berlain said the wording of the clause destroyed the old doctrine of 
contributory negligence; but it was unfair to penalize the employer 
where grossly negligent and not the employee also, and it would tend 
to prevent accident. 

Even this amendment was urged to be contrary to the principle of 
the bill and it was feared would open inquiry into the cause of acci- 
dents and so promote fictitious defenses and litigation in an attempt 
to provide for cases necessarily rare, and it was said that the real 
beneficiaries, i. e., tne family of the negligent employee, were innocent 
even if he was negligent. 

Amendments were then introduced to define serious and willful 
misconduct but were negatived as being a question for the arbitrator 
in each case. Lord Salisbury, however, said that any breach of rules 
justifying fine or imprisonment would bar compensation. 

ARBITRATION AND LITIGATION. 

In furtherance of the Government's purpose to get rid of litigation 
about accidents of employment and the friction and expense involved 
and to devise a simple and inexpensive method of settling doubtful 
questions, the bill provided (sec. 1 (3) ) that on a dispute arising (and 
then only) it must be settled by arbitration, and the decision of the 
arbitrator be registered as a judgment, in the way provided in the 
second schedule (1), (2), (3), namely: 

First. By a committee formed by the workmen and their employer 
for the purpose. This committee might settle the matter or refer it 
to a single arbitrator. 

The Government said the workmen would predominate on the 
committee or refuse to form a committee. 

Second. If there be no committee, or if the committee is objected 
to by either party before it meets, or if the committee fails to settle 
the matter or refers it, by a single arbitrator agreed on by the parties. 

Third. In the absence of agreement on an arbitrator, then by the 
county court judge of the district sitting as an arbitrator without fees. 

Fourth. If the county court judge is unable to act, then by an 
arbitrator appointed by him (paid by the State). 

APPEALS. 

The riojht of appeal was limited to reduce litigation. There was 
no appeal from the arbitrator on questions of fact, but he might, if 
he saw fit, submit questions of law to the county court judge (second 
schedule (4) ), whose decision was final, unless either party appealed 
direct to the court of appeal. At first appeal was not contemplated, 
but the appeal on the law to the court of appeal was admitted as 



workmen's compensation. 25 

necessary to reduce the numerous county court decisions to authori- 
tative general principles. It was then intended that such appeal 
should be final, but though no appeal to the House of Lords lies for 
Scotch and Irish cases, it has been decided that it does for English 
cases. 

COSTS. 

The payment of the cost of arbitration by the State was urged, but 
the Government said so doing would promote litigation. Second 
schedule (6) therefore leaves the costs to the discretion of the arbi- 
trator, but limits them to the ordinary county court costs, none to be 
paid prior to the award. (Second schedule (11).) 

REGISTRATION. 

Second schedule (8) provides that all agreements and decisions by 
committees or arbitrators shall be recorded by the registrars of county 
courts as judgments. 

LAWYERS. 

Lawyers were entirely barred from the proceedings at first, but 
before the passage of the bill the clause barring them was eliminated 
on the recommendation of the attorney general, as otherwise the con- 
duct of them would fall into the hands of advisers of a low type. Mr. 
Chamberlain said he had changed his mind on the point and approved 
the change, as their fees were restricted, and a clause (second schedule 
(12)) was inserted controlling their fees, in the discretion of the arbi- 
trator and by the court taxing scale. Any party could appear in 
person as advocate, instead of lawyers, and appearance was also per- 
mitted, on leave of arbitrator, to others, including trades-union sec- 
retaries, etc., but without any right to fees. 

DOCTORS. 

The estimate of the disability sustained being one of the most 
important questions of the bill, it was provided (first schedule (3)) 
that a workman, on giving notice of accident, must submit himself for 
examination by the employer's doctor, and on refusal to do so his 
benefits were to be suspended. During disability he must again sub- 
mit liimself for examination, if required, with the option, however, if 
he objected to the doctor or his certificate, of submitting himself to 
examination by one of the doctors appointed by the secretary of state 
(first schedule (11)), the certificate of the doctor appointed by the sec- 
retary of state to be final, and his fees to be paid by the state, as also 
those of other doctors appointed under the same authority "to report 
on any matter arising in the arbitration." (Second schedule (13).) 

Against this whole system of arbitration it was urged in debate that 
arbitration was really the equivalent of litigation, and that in the pre- 
vious year in Germany there had been 38,000 appeals from associa- 
tions of employers and 12,000 appeals to Berlin, but the Government 
felt that the bulk of accidents would not need to be arbitrated and 
that the arbitration machinery was simple and would save expense. 



26 wobkmen's compensation. 

compensation payable. 

The benefits or amount of compensation under the act were based on 
the wages earned by the injured. It was pointed out in debate that 
this worked a hardship on children permanently injured, as their 
wages are small. 

It was suggested that, if based on the wages at the time of the acci- 
dent, that might prove too little or too much, so the average weekly 
wage was fixed upon as a basis. For the three years' death benefit, if 
deceased had not been under the same employer for three years, "156 
times his average weekly earnings during the period of his actual 
employment under the same employer " was fixed by the first schedule 
(1) (a), and for the incapacity benefit, the average weekly wages over 
12 months or such less period as he had been employed by the same 
employer, was fixed as a basis by the first schedule (1) (b). 

DEATH BENEFITS. 

Where the deceased leaves persons wholly dependent, the first 
schedule (1) (a) (i) provides a compensation equal to three years' 
earnings, but not less than £150 ($729.98) nor more than £300 
($1,459.95). 

Where the deceased leaves persons partially dependent, first sched- 
ule (1) (a) (ii) provides a compensation of what may be agreed on or 
determined by arbitration as reasonable and proportionate to the 
injury to the dependents, but not more than three years' earnings nor 
£300 ($1,459.95). 

Where deceased leaves no dependents, first schedule (1) (a) (iii) pro- 
vides reasonable medical and burial expenses up to £10 ($48.67). 

An amendment to make the death benefits equal, whether there 
were any dependents or not, on the ground that inequality would 
injure married men and prevent their employment, was lost, Mr. 
Chamberlain pointing out that the friendly societies had the same dis- 
tinctions without that result. 

The dependents were limited (sec. 7 (2) (a)) to the persons men- 
tioned in the fatal accidents act, 1846, i. e., to wife, husband, parents, 
and children (an amendment to add brother and sister having been 
negatived, as the Government would not extend the scope) ; and ques- 
tions as to dependency and amounts payable therefor to be arbitrated 
in default of agreement. (First schedule (5).) 

The minimum sum be'n^ omitted from the first schedule (1) (a) (ii), 
dealing with partial dependents, compensation to parents for the 
death of a child who contributed to the family fund could be properly 
restricted to the pecuniary loss occasioned, and be fixed by the arbi- 
trator or otherwise at a proper proportionate sum instead of allowing 
the family to gain by the death. The same rule applied to amounts 
payable to other partial dependents, the attorney general saying that 
they got nothing unless they suffered pecuniary loss through the 
death. 

INCAPACITY BENEFITS. 

For injuries causing incapacity, temporary or permanent, and total 
or partial incapacity, the first schedule (1) (b) provides for a compen- 
sation, after the second week, up to a limit of £1 ($4.87) a week, of 



workmen's compensation. 27 

not exceeding 50 per cent of injured's average previous weekly 
earnings. 

In fixing the amount of compensation actually payable within those 
limits (which is done by agreement or arbitration), clause 2 provides 
that regard should be had to the difference between his earnings be- 
fore and his ability to earn after the accident. 

LUMP-SUM PAYMENTS. 

Before adopting the above benefits there was much discussion in 
debate as to the merits of adopting lump-sum and weekly payments, 
respectively, as the benefits under the bill. 

By those advocating lump-sum payments it was said that the 
benefits under continued weekly payments would aggregate more 
than the benefits for death; that payment of a lump sum would be 
better for a man; that investments of lump sums were possible which 
would prevent loss of benefit through the employer becoming insolv- 
ent; that the continuance of weekly payments during incapacity 
would be hard on employers; that lump sums would facilitate the 
employer obtaining insurance. 

Amendments were introduced but lost, making the benefits of the 
bill for death and permanent injuries lump-sum payments, like an 
ordinary accident-insurance policy, namely, a definite sum down, 
three years' wages for death or permanent total disablement, and six 
months' wages for permanent partial disablement. 

It was pointed out that payments of lump sums to widows, depend- 
ents, and persons unaccustomed to manage money would result in 
loss and its being quickly squandered, thus defeating the object of the 
bill. Mr. John Burns strongly advocated weekly payments in lieu of 
lump sums. Other members said lump sums would bankrupt and 
ruin employers. 

Mr. Chamberlain said that the permanent incapacity weekly benefit 
might be hard on an employer if he had no insurance, but if he had 
insurance it would be trivial; that the limits enabled insurance to be 
got. He said that disability payments should be more than the death 
payments, as beneficiaries got the latter. 

The views as to lump sums and weekly payments were com- 
promised as follows: 

First. By giving authority to the arbitrator in his discretion to 
invest the lump sums awarded (see first schedule (6) to (10)) — i. e., 
by agreement or by order of arbitrator a dependent's compensation 
may be either invested or not. If invested, to be either by way of 
deposit in or purchase of annuity through the post office savings bank, 
subsequently to be drawn out only on written order of the treasury 
or county court judge, and, 

Second. By providing for liberty to commute the weekly benefits 
payable. 

COMMUTATION OF BENEFITS. 

Mr. Chamberlain introduced a clause allowing a commutation of 
future weekly benefits to be agreed upon after weekly benefits had 
been paid for 12 months, either at the request of the workmen or at 
the request of the employer, limiting such commutation amount, 
however, to three years' full wages. 



28 workmen's compensation. 

Strong argument was introduced against this proposal, pointing 
out that commutation reduced benefits under the bill, and Mr. John 
Burns said it would after seven years " relegate the injured people to 
charity." 

For the clause arguments were advanced that, as the indefinite con- 
tinuation of weekly payment was defined by commutation, insurance 
would be cheaper; also that commutation would protect workmen 
against insolvent employers. The Government said that commuta- 
tion was very different from putting a stop on weekly payments, since 
the sum paid down in commutation would purchase an annuity. 

When this clause, however, reached the House of Lords they took 
away from the workmen the power to commute, and as a quid pro 
quo eliminated the limit of three years' full wages imposed on the 
amount of commutation. The House of Commons approved this 
change. 

The first schedule (13) therefore provides that where any weekly 
payment has continued for not less than six months the liability 
therefor may be redeemed by the employer by payment of a lump 
sum, fixed by agreement or arbitration, which may be ordered to be 
invested or otherwise applied by the committee or arbitrator. 

REVIEW OP AWARD. 

First schedule (12) also provides that either the master or the work- 
man may, on request, have any weekly payment reviewed, so that it 
may be ended, diminished, or increased according to the facts then 
found by agreement or arbitration. 

MANNER OF PAYMENT. 

t 

The first schedule (4) requires death payments to be made " to the 
legal personal representative/' and if none "to or for the benefit of 
his dependents," and if no dependents are left "to the person to 
whom the expenses are due"; while the second schedule (12) specifies 
that compensation shall be paid on the receipt of the person to whom 
it is payable. The second schedule (10) empowers the county court 
to make its necessary rules. 

NOTICE OP ACCIDENT AND CLAIM. 

It was urged that requiring notice of accident and claim would pro- 
tect employers against bogus claims, and would protect employees 
against losing their claims ; that notice should be given before work- 
men left the service. 

On the other hand, it was said that requiring notices would cause 
litigation, as attorneys would urge they were necessary in order to 
have the notices properly given, and further, that no notices were 
required under the general law of negligence. 

After considerable debate, following the precedent of the employers' 
liability act of 1880, the act provides (sec. 2 (1)) for notice of acci- 
dent as soon as practicable thereafter and before the workman has 
voluntarily left the service, while claim must be made in six months 
from date of accident if not fatal, and in six months from date of 
death, if fatal; but to prevent the claim of the workman from being 
prejudiced through want of or any defect or inaccuracy in notice of 



workmen's compensation. 29 

accident by a bona fide mistake or other reasonable cause (as through 
a trivial accident later developing into a serious one), the section 
provides that such want of or defect in notice shall not be a bar if it 
is found in the claim proceedings that the employer is not prejudiced 
in his defense by such want or defect or that it was occasioned by 
mistake or other reasonable cause. 

CONTRACTING OUT. 

Contracting out was the question on which the Asquith bill had 
been wrecked, and was debated at length. The Government intro- 
duced a clause into their bill on the lines of the Dudley amendment 
to the Asquith bill (which the House of Commons had then rejected). 
The home secretary said that under it the workman could not deprive 
himself of the benefits of the bill, but was to have freedom to arrange 
his own wants in his own way, provided that such arrangement was 
not less favorable to him than the benefits of the bill; in the words of 
Mr. Chamberlain, that he should have freedom to " contract out" 
provided he was "not a pecuniary loser" by so doing; that the Gov- 
ernment held to the principle of contracting out with that proviso. 

To effect this, the bill as passed repealed existing contracts by 
section 9, but by section 3 permitted the employer to substitute, 
by contract with his workman, any "scheme of compensation 
benefit, or insurance," which was certified to beforehand by the regis- 
trar of friendly societies (a permanent Government official), after 
taking steps to ascertain the views of the employer and workman, 
as "not less favorable to the general body of workmen and their 
dependents than the provisions of this act;" but save that, the bill 
was to apply notwithstanding any contract to the contrary. 

Section 3 (2) provides that the registrar's certificate might expire 
at the end of a limited period of not less than five years, and section 
3 (3) prohibited the issue of a certificate for any scheme "which 
contains an obligation upon the workmen to join" as a "condition of 
their hiring." Section 3 (4), moreover, made it the duty of the regis- 
trar to examine into any complaint on behalf of the workmen that 
the scheme is no longer so favorable or is not being fairly administered, 
and so forth, and revoke his certificate if good cause exists, unless 
such cause is removed. 

It was urged by the opposition (Mr. Asquith) that a workman 
should not be permitted to waive advantages given in the interest of 
the community, but it was answered there was no objection, if he gets 
better terms. Other objections to the clause were that the schemes 
would localize men; that the clause would injure friendly societies, 
as the workmen's contributions to schemes would take the place of 
contribution to the benefit and friendly societies whose income was 
mainly from that source; that the workmen and trades unions were 
against it. 

It was answered that the clause would give a great impetus to 
friendly societies and would allow existing associations to use their 
own machinery and go further than the bill, since employers would 
figure out the cost of accidents over 5 to 10 years, and contribute 
the necessary amount to the existing associations, allowing the work- 
men to manage them; that the latter would deal with the slight 
accidents themselves and prevent malingering, and reduce the cost of 



30 workmen's compensation. 

accidents so as to have more to spend on their sickness features. It was 
also urged that friendly societies were based on considerations other 
than pecuniary ones, and that the clause compelled the registrar to 
ascertain the views of workmen and employers before certifying a 
scheme. 

Mr. Chamberlain introduced an amendment to make the employer 
liable if the funds of the scheme failed, but against this it was urged 
that such a liability would prevent the clause being used, as em- 
ployers would consider it a " heads you win, tails I lose" clause. 

Mr. Balfour said the employers' inducement to form schemes was 
the establishment of better relations with their men, and the work- 
men's inducement to get more money from their employers. But 
the clause guaranteeing the solvency of the fund was ultimately 
eliminated by the House of Lords on the ground that as the workmen 
would spend the money, it would prevent all contracting out, and the 
elimination was subsequently agreed to by the House of Commons on 
the ground that the registrar had to be satisfied that the employers' 
liability was the equivalent of the bill. 

The House of Lords passed an amendment allowing the registrar 
to consider as a basis for his certificate all the circumstances of the 
case, which was disagreed to by the House of Commons, however, 
and failed. 



PRACTICAL WORKING OF THE ACTS— RECOMMENDATIONS. 



In November, 1903, a committee was appointed by the home- 
secretary to inquire and report to the home office — 

(1) What amendments in the law relating to compensation for 
injuries to workmen are necessary or desirable, and 

(2) To what classes of employments not now included in the 
workmen's compensation acts those acts can properly be extended 
with or without modification. 

This committee consisted of the following gentlemen: Sir Kenelm 
Digby, K. C. B. (chairman) ; Sir Benjamin Browne, D. C. L. Memb. 
Inst. C. E.; His Honor Judge Lumley Smith, K. C; Capt. A. J. G. 
Chalmers, of the Board of Trade; Mr. George N. Barnes, secretary 
of the Amalgamated Society of Engineers; and Mr. Robert Reid 
Bannatyne, of the home office (secretary). 

The committee utilized information furnished by the labor depart- 
ment of the board of trade and other Government departments, by 
inspectors of factories and mines and other Government officials, 
and by the judges of the county courts. It took extended evidence 
from representatives of both employers and workmen in the chief 
industries, from employers' associations and trades unions, from 
mutual and ordinary insurance companies, and from numerous other 
sources. It made an exhaustive report in August, 1904, which has 
been accepted as a basis for future legislation, and its evidence and 
findings are therefore referred to at length here. 

SCOPE OF THE ACTS. 

The restriction of the scope of the acts to a few industries was 
carefully considered by the committee, and they concluded that the 
experience justified extension to other industries. 

The^act of 1900 including agriculture had taken away the dan- 
gerous employment test for inclusion, and that test could not there- 
fore be adopted as the general principle in extension to other occu- 
pations. 

The two alternatives presented were to amend the acts (1) by a 
general extension of their scope to cover all occupations with cer- 
tain definite exceptions, such as (a) small employers, (b) some forms 
of casual labor, (c) employments which are not by way of trade or 
for the purpose of profit, as limited in the factory acts; or (2) by 
extension to further specially specified industries. 

The committee recommend the latter course, suggesting inclu- 
sion of any industries which were dangerous, and also those to 
which the advantage of the act could be applied without impos- 
ing an undue burden on the employers, provided that the industry 
to be included was not one composed largely of small employers 

31 



32 workmen's compensation. 

who did not insure. As to the limitations on the employments 
already covered in the act which had been found to be unsatis- 
factory, they recommended changing section 7 (1) limiting the 
act to accidents "on or in or about" the places or works, to cover 
accidents ''while on the business of the employers/' since they 
found that, though they were intended to limit responsibility to 
places which were under the employers' control, those words of the 
act had resulted in dissatisfaction and incongruity, a mechanical 
engineer, for instance, being covered in the factory, but not while 
superintending erection for his employer. They recommended 
covering all building, all quarries, and practically all laundries 
(except only those without more than two persons outside of the 
family). They also recommended including under the definition of 
engineering, road making, well sinking, and other excavating opera- 
tions, also the construction of telegraphs, telephones, and other 
electric appliances. 

TEADE DISEASES. 

The committee did not, however, consider it advisable to include 
trade diseases, thinking it better to leave those to special legislation 
for sickness, and to still leave to the courts such questions as " whether 
anthrax is an accident." 

SEAMEN. 

Employers urged the hardship and impracticability of includ- 
ing seamen under the act, owing to prolonged absence of ships and 
absence of owners' control, frequent changes in crew, and conse- 
quent impossibility of securing evidence, as well as the fact that 
the "whole venture is frequently imperiled through act of God," 
and consequently compensation should be undertaken by the State. 
On the other hand, Mr. Havelock Wilson, who has strongly advo- 
cated the cause of seamen, urged that exactly the same conditions 
as to compensation should prevail at sea as on shore. He testified 
that shipowners were heavy insurers and could bear a loss. 

The committee found that as the principle of the act established 
compensation, whether blame existed or not, the absence of control, 
etc., gave no reason (nor did they find any) why the principle should 
not extend to those afloat as well as to those on land. However, 
after considering the construction of the existing merchants' ship- 
ping act, which already amply provided for minor injuries, they 
recommended an extension of that act to cover death and perma- 
nent total and partial disablements of seamen rather than an exten- 
sion of the workmen's compensation act. As coasting and fishing 
vessel owners frequently had no assets if their vessels were lost, and 
as the lives of master and crew frequently had to be risked at sea 
in the cause of humanity, the committee recommended compulsory 
insurance with State contribution for seamen, recommending, how- 
ever, further inquiry as to the fishing trade. 

CARRIERS. 

They recommended inclusion of all carriers by land or inland 
navigation. 



WORKMEN 's COMPENSATION. 33 



WORKSHOPS. 



They recommended inclusion of the larger workshops, excluding 
all employing not more than five persons. 



SHOP ASSISTANTS. 



They did not recommend inclusion of shop assistants, unless there 
was a general extension of the act, as this was not a hazardous occu- 
pation, and " there would also be considerable difficulty as regards 
small shops.' ' 

DOMESTIC SERVANTS. 

For a similar reason, as well as on the ground of not further extend- 
ing the principle to persons not employed in trade or for purpose of 
gain, they did not recommend the inclusion of domestic servants, 
unless under special circumstances of danger, such as coachman, etc. 

PUBLIC SERVANTS. 

As to public servants, the committee saw no reason for treating 
them differently from other work people. 

DEFENSE OF SERIOUS AND WILLFUL MISCONDUCT. 

Section 1 (2) (c). — The evidence of both employer and workman 
indicated that this defense had been in practice infrequently enforced 
or sustained by the courts (perhaps with the exception of coal-mine 
cases), though employers who desired a more specific definition had 
possibly suffered hardship from it rather than the men. The com- 
mittee felt it better to leave it open to the arbitrator to look at the 
surrounding circumstances whenever the defense was set up, and they 
therefore did not feel justified in recommending any change in the 
wording or clause. 

TWO WEEKS' IMMUNITY — MALINGERING. 

Section 1 (2) (a) and first schedule (1) (b) . — In the evidence before 
the committee from the workmen's side it was almost universally 
represented that a reduction of the period of nonpayment from two 
weeks to two or three days, and in the case of serious accidents dating 
the compensation back to the day of the accident, would save much 
hardship, especially in those trades where women were employed, 
where pay was low (in which connection it was stated that 150,000 
railroad employees earned less than 18s. ($4.38) a week), or where 
the injured people were not members of any friendly society; while 
from the employers' side it was shown by figures submitted that the 
two weeks' nonpayment prevented malingering by workmen absent- 
ing themselves from wort for injuries that were trivial and more or 
less unreal. 

The committee concluded that while it was true that a large num- 
ber of workmen were put to suffering by this provision, if it were 
eliminated a large number who had also allowances from friendly 
societies, etc., would prolong the period for trivial accidents, which 
it was impracticable for employers to supervise, and that dating 
back the compensation, if the disablement lasted for two weeks, 

S. Doc. 618, 62-2 3 



34 workmen's compensation. 

would also produce malingering. Again, having regard to the addi- 
tional cost involved of including all cases during the first two weeks, 
shown by insurance companies to be from 25 to 50 per cent, varying 
with the different trades, and by the registrar of friendly societies for 
the schemes he had certified to be 39 per cent of the total cost, while 
dating compensation for disablements lasting two weeks back to the 
day of accident produced estimates of a somewhat less addition to 
the cost, the committee found no sufficient reason to justify them in 
recommending a departure from the principle of two weeks' immunity 
deliberately adopted by the legislature. 

ACTS OF STRANGERS. 

Employers liable under the act being limited by section 7 (1) to 
" undertakers/' with a view to prevention of the workmen's loss of 
benefits or evasion of employers' responsibility by subcontracting, 
it was found that section 4 of the act, which made the undertaker 
liable to subcontractors' men, might become a dangerous extension 
of liability if the act were changed to cover work being done off the 
premises of the undertaker (for instance, it might make a cloth 
manufacturer liable to the cloth dyers' men), and the committee 
recommended avoiding the extension of undertaker's liability away 
from his works. 

It was also pointed out that while it was the intention of the act 
(sec. 4) that the undertaker should have an indemnity over against 
the actual employer of the injured man, technical interpretation of 
the wording of the act had precluded him in many cases from getting 
it, as in the case of railways, factories, mines, and quarries. The 
committee therefore recommended treating the undertaker more as 
a surety in any judgments rendered, etc., and making him, in fact, 
merely a guarantor of compensation payable by subcontractors. 

act or 1900. 

This act, in adding agriculture, was different from the act of 1897 
in that it attempted to exempt small employers and was not con- 
fined to trade or industry but extended to persons in private employ- 
ment. 

One difficulty found in the application of this act was the legal 
interpretation of the limitation of the act to employers who habitually 
employ one workman and it was recommended that this be changed 
to " employ throughout the year at least one workman in agriculture ; " 
it was also recommended that the casual laborer, including harvesters, 
etc., at hay time, be not covered. Another difficulty was that the 
small farmer did not insure, with consequent danger of ruin to him 
financially and failure to compensate his workmen. 

PREVENTION OF ACCIDENTS. 

As to the effect of the workmen's compensation act in the direc- 
tion of the prevention of accident, the committee found it extremely 
difficult to estimate it. 

The evidence of the chief inspector of factories showed that the 
act somewhat tended to eliminate the probability of recovering 
penalties for failures to guard machines, etc., owing to the fact that 



workmen's compensation. 35 

a provision in the act (the latter part of sec. 1 (5)) dealt with penal- 
ties and limited the amount of their payment to the injured work- 
men. Other evidence showed that there had been some tendency 
to make employees more careless. 

On the other hand, a coal mining employers' association said 
that the act had resulted in a great diminution of real accidents, 
namely, serious cases, but that it had been accompanied by a great 
rise in obscure accidents, namely, cases like sprains and trivial acci- 
dents; and other testimony was to the effect that increased precau- 
tions to avoid accidents had resulted. 

The committee, on the whole, came to the conclusion that the act 
had not had any marked or ascertainable effect one way or the other 
upon the safety of the workmen. They, however, recommended 
the repeal of the latter part of section 1 (5), as they did not consider 
there was any serious objection, where negligence caused an injury, 
to the injured workman receiving additional compensation by having 
a penalty, recovered under criminal enactment, paid over to him in 
whole or in part by the secretary of state. 

BURDEN OF THE ACTS. 

The committee took testimony as to the extent of the pecuniary 
burden resulting from the acts, with a view to seeing that no excessive 
burden was thrown on the employer, with consequent injury to the 
trade and ultimate loss to the workmen. 

They expressed the opinion that employers might be reaping an 
advantage from having a defined obligation by law imposed on all 
employers, instead of trusting to moral obligations, which were met 
by some employers and not by others; that in some instances em- 
ployers threw the burden on the consumer (as, for instance, they 
found stevedores to be including the cost in their contract prices); 
that when the labor was unorganized it was sometimes directly 
thrown upon wages (which they suggested might be checked by 
extending legislation in line with the Truck acts). One of the 
members of the committee, Sir Benjamin Browne, had estimated 
that the act affected trade profits to the extent of reducing a 5 per 
cent profit on capital to 4J per cent, saying also that English manu- 
facturers had so much competition with foreign trade that it would 
restrict employment and fall, as permanent burdens do, on workmen. 
The committee, however, believed from the evidence submitted 
that so far as employers were concerned their chief desire seemed 
to be for greater certainty in their liability, as certainty made insur- 
ance premiums less, and they found that the steady growth of the 
burden of the permanent weekly payment benefits was a difficulty 
preventing employers arriving with certainty at the cost, as these 
necessarily go on accumulating year by year until the point is reached 
at which the number of new pensioners is balanced by the dropping 
off of the old. 

COST OF THE ACTS. 

The committee took the effect on the coal-mine industry as a 
crucial test of the act. In the evidence before them on the subject 
of cost one coal owners' mutual insurance association, which had 
been formed by the large coal owners in the north, after the passing 



36 workmen's compensation. 

of the act, testified that the cost of all the accidents in their mines 
had been 0.36d. (0.73 cent) per ton in 1899, increasing to 0.64d. (1.30 
cents) in 1903, or a trifle over one-half of 1 per cent on wages in 1899, 
increasing to nearly nine-tenths of 1 per cent in 1903, the increase 
being attributed to the growth of the permanent weekly payments. 
The association itself paid for the cost of supervision and for all legal 
expenses, as well as for all disasters (accidents involving more than 
four deaths), and later for all deaths, leaving the employers individu- 
ally to pay for nonfatal cases. Another similar association in the Mid- 
lands gave similar evidence, namely, that their increase in cost was 
most marked in the accidents which fell into their classification of 
nonfatal cases over 26 weeks' duration. A similar Yorkshire asso- 
ciation, covering 20,000,000 tons of coal raising yearly, testified that 
their actuary estimated on their experience that the cost, including 
medical, which was a trifle higher than the first association quoted, 
would, through the permanent allowances, go nearly as high as 1J 
per cent of wages before reaching the maximum. And a South 
Wales association, covering 80,000 men, showed that the cost had 
risen from a little over one-half of 1 per cent on wages in 1900 to 
three-fourths of 1 per cent in 1903, attributable to the permanent 
allowances, with a guess that it might reach double the last figure. 
The committee therefore felt that the rapid growth of compensation 
in the coal industry, its uncertainty, and the liability to disasters in 
that trade were reasons for caution in materially increasing the 
benefits payable under the act. 

One cotton-trade mutual insurance association, covering 40,000 
work people, originally estimated the cost at one-eighth of 1 per cent 
on wages for weaving, and three-eighths of 1 per cent for spinning, 
but found that one-sixteenth of 1 per cent was adequate for weaving, 
and thought a little more than one-fourth of 1 per cent would suffice 
lor spinning. The Master Cotton Spinners' Association, paying 
£3,000,000 ($14,599,500) a year wages, which had estimated the cost 
of spinning up to one-half of 1 per cent, gave evidence showing a simi- 
lar cost, though it had secured insurance at less. 

A mutual builders' accident insurance company that " insured some 
thousands of firms," found without, however, reserving for perma- 
nent injuries, that the cost was one-half of 1 per cent. A large firm 
of building contractors courteously related their own experience. 
They stated that they transfer the cost to the purchaser in their con- 
tracts, and that they also protect themselves by contract with their 
subcontractors against claim by the subcontractors' men, though in 
practice the latter invariably proceed against the subcontractors. 



WORKMEN S COMPENSATION. 



37 



Ratio of accidents to total workmen employed and of compensation to total wages paid b$ 
a firm of building contractors, 1901 to 1906. 



Year. 



Accidents. 



Number. 



Per cent 
of total 
work- 
men. 



Compensation Jo- 
accidents. 



Amount. 



Per cen : 

of total 

wages 

paid. 



1901 
1902 
1903 
1904 
1905 
1900 



84 
72 
84 
114 
133 
94 



6.6 
4.8 
5.4 
7.8 
8.2 
6.6 



:1,645 
3,601 
3,256 
4,034 
5,358 
7,412 



0.15 
.68 
.50 
.6t 
.75 

1.10 



As to the regular commercial insurance companies, the committee 
quoted especially the evidence of Mr. S. Stanley Brown, general 
manager of a leading company, who said that rates of insurance 
against accidents charged by an association of these insurance com- 
panies, which were at first based on the German and Austrian 
experiences, had been found too high, and in June, 1899, were 
reduced one-third, resulting in the percentage of rates on wages 
shown in the second column of the following table, while his own 
company's rates for December 31, 1903, are shown in the last column 
of the table. His company gives the average of all rates charged 
by them as nearly 1 per cent. 

Rate per cent on wages imposed for insurance against accidents in various industries by an 
association of insurance companies in 1899 and by a leading commercial insurance 
company in 1903. 



Industry. 



Rate per cent on wages 
imposed by — 



An associa- 
tion of com- 
panies, 1899. 



A leading in- 
surance com- 
pany, 1903. 



Builders, general 

Contractors 

Stevedores 

Quarries 

Engineers and iron smelting. 

Textiles 

Manufactures, light 

Manufactures, heavy 



1.25 
1.67 to 2. 38 
2.38 
1.50 
1.00 
.33 



1.00 

1.20 to 2.56 

2. 38 to 10. 06 

1.26 

.50 to 1.06 



.55 



The reports of the same insurance company show an almost 
steady yearly increase in the average cost of each accident settled, 
as follows: 

Each death case cost £113 ($550) during 1901, increasing to £117 
($569) during 1905; each permanent disablement case cost £55 ($268) 
during 1901, increasing to £87 ($423) during 1905, and in 1906 to 
£97 ($472) ; each temporary disablement case cost about £5 ($24), 
with little fluctuation during the period. 

The committee said that it was through such associations of 
masters and men, respectively, and the ordinary insurance com- 
panies that the financial burden was removed from the shoulders of 



38 workmen's compensation. 

the individual employer and distributed more or less equally through- 
out the trade. 

The actual cost of the compensation acts to the different trades is 
not to be had officially, with one exception, that of railways. In the 
home office returns it is stated that the total amount paid by the 
railway companies as compensation under the act in the whole 
country was £118,849 ($578,379) in 1899, £146,027 ($710,640) in. 
1900, £153,928 ($749,091) in 1901, £144,155 ($701,530) in 1902, 
£155,495 ($756,716) in 1903, and £162,155 ($789,127) in 1904. 

BANKRUPTCY OF EMPLOYER. 

It was found that so far, owing to prosperous times and the act 
being limited to the larger employers, there had been little difficulty 
from this source; however, the committee felt that the danger of 
distress to workmen through it happening was very real and should 
be provided for, especially if the act were extended to cover small 
employers. They advocated substituting for the personal responsi- 
bility of the individual employer the security of a solvent insurance 
fund. The committee attached great weight to recommendations 
of statutory regulation of all insurance companies undertaking the 
risk, such as exist in America, etc., to provide against dangerous 
competition, and drew attention to the necessity of seriously con- 
sidering a State or compulsory insurance in some form or other; 
especially was this necessary to enable the workmen of the small 
employer to get his benefits, since through ignorance or inability his 
employer failed to insure in many instances. 

The committee concluded that this evidence showed that the 
burden on employers had as yet not been excessive, but that it 
tended to increase. This suggested caution in legislation increasing 
it and especially in adding to its indefiniteness or uncertainty. 

CHOICE OF REMEDIES AND LIABILITY OF EMPLOYER. 

The committee reached the conclusion that the provisions of 
section 1 (2) (b) and (4), permitting choice of the remedies of suit 
under the employers' liability act of 1880, or common law, or pro- 
ceeding under the workmen's compensation act, and also allowing 
the benefits under the latter to be assessed on failure of suit under 
the former, had worked largely to the disadvantage of both employers 
and workmen, and were responsible for a large amount of illegitimate 
litigation, in that they had resulted in the illegitimate use or threat 
of use against the employer of the remedies at common law and under 
the employers' liability act of 1880, either for the purpose of bene- 
fitting the unscrupulous lawyers, who could thereby run up the 
costs, or for the purpose of improperly forcing settlement under the 
workmen's compensation act, and that the judge's power to assess 
the costs of an unsuccessful suit against the compensation under the 
workmen's compensation act was in practice rarely used and was 
therefore ineffective as a check. That this abuse had assumed 
somewhat extended proportions was shown in the fact that, according 
to Mr. Troup's testimony, in litigated cases in 1902 the cases under 
the employers' liaoility act amounted to about half the workmen's 
compensation cases in Scotland, as against one-third in England, and 



workmen's compensation. 39 

that the costs under the employers' liability act averaged £25 
($121.66), as against £11 ($53.53) under the workmen's compensa- 
tion act. 

A simple remedy for these abuses would have been to repeal the 
employers' liability act and common-law rights or consolidate them 
with the workmen's compensation act; however, while admitting 
that the testimony showed that the advantages to workmen were 
great of proceeding under the workmen's compensation act in prefer- 
ence to taking the risks, uncertainty, and costs of suit under the old 
remedies, they believed repeal of those old remedies was not justified, 
as there were cases where they were the more appropriate remedies, 
though they anticipated they would fall more and more into disuse. 

Another suggestion considered was to grant higher benefits under 
the workmen's compensation act where there was much pain or 
suffering, disfigurement, extraordinary expenses of cure, or wrongful 
act or default of employer. This they believed would only be reen- 
acting the employers' liability act as part of the workmen's compen- 
sation act and would be more of an incentive to attorneys to litigate 
in a larger number of cases, on the chance of securing the higher 
benefits than the existing election, which tended to prevent litigation 
somewhat. 

Therefore, to prevent these abuses without preventing recourse to 
those old remedies in cases where they were really appropriate and at 
the same time without inflicting any real loss upon the workmen, the 
committee recommended the repeal of section 1 (4), which gave the 
court power to assess compensation after unsuccessful suit under the 
employers' liability act of 1880 or at common law and the adoption 
of provisions enabling employers to apply to the judge for a stay of 
any such suits (commenced or threatened) on evidence that the 
workman had an adequate remedy under the workmen's compensa- 
tion act; also, that a plea to that effect might be made available as a 
defense to suits under the employers' liability act of 1880 or at 
common law. 

This would leave it open to the court, if it thought the workmen's 
compensation remedy inadequate or that there was good ground for 
a suit at common law or under the employers' liability act of 1880, to 
refuse the application or, if it thought otherwise, to stop the suit. 

DEFENSES OF FELLOW-SERVANT NEGLIGENCE, ASSUMPTION OF RISK, 
AND CONTRIBUTORY NEGLIGENCE. 

The committee said that the principle of the workmen's compensa- 
tion act was essentially different from that on which the old remedies 
were based, and that it had largely superseded the old remedies and 
would in future entirely supersede them; that it was, therefore, 
undesirable to bring those old remedies into more active operation, 
which would result from any attempt to abolish the doctrine of 
fellow-servant negligence, etc., and that so doing would open 
the floodgates to a stream of litigation without affording any more 
effective remedy than now provided by the workmen's compensation 
act. They therefore recommended leaving the common law and 
employers' liability act unchanged, on the expectation that they 
would gradually cease to be used. 



40 



WORKMEN S COMPENSATION. 



The wisdom of this is illustrated by the home office returns of the 
figures for death, which is more likely to result in suit than less serious 
injury, given in the following table: 

Average damages in case of death under employers' liability act and average compensation 
under workmen's compensation acts, 1899 to 1904. 





Employers' liability 
act. 


Workmen's compensa- 
tion acts. 


Year. 


Cases of 
death. 


Average 
damages. 


Cases of 
death. 


Average 
compensa- 
tion. 


1899... 


14 
7 
9 
8 

14 
9 


$556. 18 
772. 94 
436.77 
561.55 
i 1, 198. 44 
575. 54 


219 
245 
301 
264 
323 
451 


$842 29 


1900 


795 37 


1901 


916 75 


1902 


817.59 


1903 


880. 84 


1904 


864. 03 







1 Including two cases of special damages. 

The average amount of lawyers' costs was approximately £25 
($122) under the employers' liability act and £13 ($63) under the 
workmen's compensation act. 

ARBITRATION AND LITIGATION. 

The committee inquired as to how far criticism of the act was 
justified on the score of litigation and how far it was due to prevent- 
able causes. 

They found that the vast majority of cases were settled by agree- 
ment, without litigation. 

Secretaries of the leading trade unions gave details showing that 
many unions had all accidents reported, and settled the bulk of the 
cases for the men without any cost, and that some cases of difficulty 
were settled by their lawyers. The use of lawyers varied somewhat 
in the different trades, as did the arbitration and court cases, the 
latter being covered in most trades by 5 to 10 per cent of the cases. 
In the South Wales Miners' Federation (130,000 men) the number of 
court cases was said to be "mfinitesimally small," and they were 
cases only where a question of principle existed to be settled, or a 
dispute as to facts, although there had been several disasters in the 
trade. Employers' associations and mutual insurance associations 
corroborated the trades union testimony that 95 per cent of the 
cases were settled out of court. Other insurance societies and two 
leading railways said that only 1| per cent of claims were arbitrated, 
the rest being settled by agreement. The secretary of the Cotton 
Trades Insurance Association (formed after the 1897 act) said that 
his practice was to settle with the trades union secretaries; that he 
had only 1 per cent of cases in court, and that only two cases had 
been brought under the employers' liability act of 1880, and those 
in the first year of the association's existence; that it was in the non- 
union trades that men went to attorneys, who ran up the costs. 

The limitations of employment covered by the acts were found to 
be responsible for most of the litigation. In 1902, 43 appeals out of 
95 turned on the question as to whether the employment was or was 



wokkmen's compensation. 41 

not within the act. The committee felt that the inclusion of all 
building operations under the act, even the small builders, would 
obviate litigation arising out of the limit to over 30 feet in height, 
the requirement of scaffolding and the employment of machinery, 
etc., and that the removal of the 20 feet deep limit from quarries 
and the removal of the special requirements as to laundries would 
also obviate litigation. 

Definitions which had also caused litigation were considered, such 
as " accidents arising out of and in the course of the employment.' ' 
No change as to these was recommended, however, as they had been 
so often judicially passed on and were best left to the courts. The 
committee had no recommendation to make as to factories proper, 
railways, or mines. As to constructive factories, although the House 
of Lords' decisions had modified the difficulties as to loading and 
unloading on docks, the committee recommended that employment 
on docks, wharves, quays, and warehouses be specifically stated in 
the act, covering also the incidental machinery or plant, and they 
recommended a change in the definition of engineering. 

The committee drew especial attention to the fact that in the one 
district (the Durham coal-mining district), where, under second 
schedule (1), a committee of employers and men had been formed 
and exercised their statutory power of arbitration, a most excellent 
example of satisfactory reduction of litigation was shown. It resulted 
in the benefits being paid automatically, even the committee having, 
during five years, to pass only on 205 cases out of 28,000 nonfatal 
cases and on 204 out of 664 fatal cases, while of these only 29 nonfatal 
and 27 fatal cases were taken into court, and some of those were acci- 
dents in which the men's own committee told them they had no case. 

ARBITRATION PROVISIONS. 

It was found that the arbitration by the system of committee of 
employer and workman (second schedule (1)), which, however, had 
not been extensively used, had been most successful where used, 
practically rendering the operation of the act automatic, nor was 
there any complaint of the provision (2) that the parties appoint a 
single arbitrator. But the provisions (2) and (3) for use of the county 
court judge or his appointee as arbitrator, had resulted in the arbi- 
trations thereunder being practically county court trials somewhat 
simplified ; however, no recommendation was made to change that. 

A strong recommendation of change was, however, directed to the 
clause (second schedule (8)) as to registration of memoranda of 
agreements, with a view to controlling the agreements made; it took 
the form of placing a duty on the employer to register them, empow- 
ering the court to enforce a penalty for failure to do so, and rendering 
them, if unregistered, unavailable as a defense to future claim for 
weekly payments. 

APPEALS. 

The creation of a special court (two county court judges and one 
permanent judge) to hear appeals on both law and fact, with appeals 
therefrom to both the court of appeals and the House of Lords, was 
suggested by Mr. Ruegg, in order to obviate the delay of appeals, and 
bring the different county court decisions more into harmony. The 



42 workmen's compensation. 

committee, however, recommended that no appeal be allowed on 
questions of fact, and no change be made except in the direction of 
unification of decisions on law, by permitting appeal on law to the 
House of Lords from both Scotland and Ireland, the chief dispute on 
fact being as to serious and willful misconduct, which was dealt with 
by the arbitrator. Greater facility of appeal would, they believed, 
add to delay and expense. 

DOCTORS. 

As the causes of the act dealing with doctors (first schedule (3), (11), 
and second shedule (13), made provision for calling in the official 
medical referee in arbitration proceedings only after the other medical 
testimony had been heard, practically no use was made of him, nor 
was he much used when a review of compensation being paid was 
contemplated, as then it was only optional with the workman to go 
to him at his own expense. The committee, therefore, recommended 
that the medical referee should be used at a much earlier stage; that 
after the examination by the employer's doctor, the result should be 
communicated to the workman in order that the workman might 
then be examined by his own doctor, and if a dispute existed it should 
then and there be submitted to the medical referee before the dis- 
puted case goes to court, and that his decision should be final for any 
subsequent proceedings. One modification, however, was suggested 
for new accidents, namely, of leaving to the discretion of the registrar, 
after the reports of both the doctors of the employer and the work- 
man had been filed with him, the question of using the medical referee. 

It was thought advisable to leave the judge his power of summoning 
the medical referee to sit with him as assessor in the actual trial if a 
case reached the court. 

It was further suggested that the medical referee should have the 
duty of giving employment certificates as to aged, infirm, or maimed 
persons for their special rate of compensation, which the committee 
had recommended. 

As to the position of the medical referee himself, it was strongly 
urged that he should be a public officer rather than a medical man in 
practice, paid by salary, not by fees. In other words, a civil servant 
in the permanent civil service, one to act for each district, and to 
prevent making him a partisan by his employment either by one side 
or the other, that he should have his salary paid by the State. 

The committee found that where the organization of the master 
and men was most complete there was the least amount of litigation, 
the workmen who had no organization to resort to necessarily having 
to call in the assistance of lawyers. They concluded that authorita- 
tive decisions being necessary the actual litigation produced by the 
act had been very small, and they felt that providing more effective 
machinery for settling doubtful questions and increasing the functions 
of the medical referee would further reduce it. 

From the official figures of the proportion of cases that reach the 
courts, it will be seen that in the home-office statistics for 1904 it is 
stated that even in cases of death (including cases finally settled out 
of court, and also those in court solely to apportion benefits among bene- 
ficiaries) not 25 per cent came in any way before the courts, while 
probably less than 1 per cent of incapacity cases did. 



workmen's compensation. 43 

COMPENSATION PAYABLE — THE BENEFICIARIES. 

As to the persons entitled to receive compensation, though the 
definition of workman in the act was wide (covering all employees, 
whether in manual labor or otherwise, etc.), the committee recom- 
mended the inclusion of brother and sister in the beneficiaries in 
addition to descendants and ancestors (i. e., the English definition of 
dependents). This was opposed by employers, who said it would 
tend to increase their difficulty, in that they now had to pay com- 
pensation exceeding what was necessary for the support of dependents, 
as, for instance, to pay a father earning good wages for the death of 
a son, provided as a fact the son contributed slightly to the family 
fund. 

Aliens killed or injured within the United Kingdom have the same 
right of recovery (as have their beneficiaries while resident also) that 
British subjects have under the act. The committee, however, recom- 
mended that the act be made not to extend to beneficiaries who are 
nonresident aliens, or to beneficiaries who are nonresident British 
subjects, so as to obviate difficulty in determining the liability 
involved. 

DEATH BENEFITS. 

The committee found little criticism, when the deceased left persons 
wholly dependent, of the amount of the limits payable — minimum 
£150 ($730), maximum £300 ($1,460)— and concluded they had been 
found satisfactory in practice, and though they found some complaint 
from employers of decisions as to what constituted partial dependency 
and awards that disregarded consideration of whether such dependency 
was for necessaries or not, they concluded that no change in that defi- 
nition was desirable. 

INCAPACITY BENEFITS. 

Interpretation of the courts as to what constituted average weekly 
earnings resulted at one time in excluding all casual labor, through the 
difficulty of reaching an average for a man employed spasmodically, 
casual labor covering not only men employed for a job, but large 
classes, like dock labor. Although the House of Lords reversed this 
decision, the committee recommended that the duty of " estimating," 
the injured man's own earnings should be placed upon the judge, 
guided somewhat by the standard of the district for like employment 
(as provided by the employers' liability act of 1880), instead of taking 
the district standard of wages alone, though the latter would be a 
simpler method. They also recommended an amendment to base it 
on the net and not on the gross earnings, as the latter often included 
pay for helpers, tools, etc. 

LUMP-SUM PAYMENTS. 

Evidence submitted showing the squandering and loss of lump 
sums paid to widows and the advantage to them and to children of 
weekly payments in lieu of lump sums, as well as evidence showing the 
cost to the employer in getting valid releases, led the committee to 
recommend more elasticity in the powers conferred on the arbitrator 
in this regard under first schedule (6) by payment of the money into 
court by the employer and granting the arbitrator a voice in the 



44 workmen's compensation, 

method of distribution. They recommended that the mode of pay- 
ment be settled in each case by the county court judge, with power to 
reduce the amount of any weekly payment to a widow on remarriage, 
neglect of children, etc., and to decide on the amount, time, and mode 
of payments to beneficiaries other than the widow, using the office of 
the county court as the machinery for that purpose whether the 
amount and compensation was settled by agreement or otherwise. 

OFFICIAL COUNTY COURT RETURNS. 

The official returns of cases under the workmen's compensation acts, 
dealt with by county court judges, and their arbitrators in England 
and Wales, show that in the six years, 1899 to 1904, the average award 
for deaths where there were dependents varied from £163 8s. 9d. 
($795.37) to £188 7s. 7d. ($916.75); for total incapacity, from 10s. 
lid. to 12s. 2d. ($2.66 to $2.96) per week, and for partial incapacity, 
from 9s. 2d. to 10s. 9d. ($2.23 to ^2.62) per week, while in 1894 the 
average lump-sum award for incapacity was £34 12s. 8d. ($168.54), 
there being in that year 105 lump-sum against 650 weekly payment 
awards. 

MINORS. 

Both employers and workmen agreed that one-half wages paid to 
minors permanently injured had proved to be often insufficient com- 
pensation. Proposals were made to consider, in fixing compensation, 
the full wages earned by the highest-grade workmen in the same 
employ; to fix a higher scale than one-half wages — say, full wages; to 
fix a minimum of 10s. ($2.43), with power to increase that on reaching 
21 years of age. The committee recommended fixing a maximum and 
leaving it to the discretion of the judge to assess an amount up to that 
maximum. 

OLD MEN AND MAIMED AND DISEASED PERSONS. 

The committee found from extended evidence of both employers 
and workmen that the acts had largely increased the difficulty already 
existing of old men getting and retaining employment. They found 
further that employers were being compelled to discharge persons 
maimed, as, for instance, one-eyed men, and to refuse to reemploy 
them after accident. While the case of Lysons v. Knowles (1 Q. B., 
780; 69L.J.Q.B.,449; 82 L.T., 189), decided by the House of Lords, 
finally settled that casual labor was not excluded from the act, it was 
felt, too, that this decision would further operate to bar old men from 
employment. 

This the committee considered to be such a serious drawback to the 
other advantages of the act that they recommended amendments to 
be made enabling employers to hire such persons upon special terms 
as to compensation for accidents, and they suggested an age limit of 
60 as desirable if hale, and under that age if infirm or maimed, to 
which the amendment should apply, with a minimum compensation 
of 5s. ($1.22) a week for injury and £25 ($121.66) for death. 



workmen's compensation. 45 



COMMUTATION OF BENEFITS. 



The evidence showed that in practice the employer's right under 
first schedule (13) to apply for a redemption by arbitration of weekly 
payments by a lump sum was rarely used; that few agreements for 
commutation were registered even under second schedule (8), but that 
great numbers of unregistered commutations had actually taken place 
by voluntary agreement. The latter permitted the defense of accord 
and satisfaction to subsequent claim for weekly payments. These 
commutations were often made at figures very much below what the 
weekly benefits justified, and in many cases were improvident and also 
oppressive settlements, brought about by improper pressure on the 
workmen. Though it was found undoubtedly advantageous to work- 
men, as well as masters, that commutation should be possible, the 
committee said that better control over it should be adopted. They 
considered that the evidence showed it would be disadvantageous to 
give the workman a right to demand a commutation as likely to 
increase the evils attendant on lump-sum payment generally, but in 
order to render the principle of compulsory commutation workable, 
if demanded by the masters, the committee recommended the adop- 
tion of a maximum limit on the amount of commutation of £500 
(2,433), and urged, after making the obligation to register commuta- 
tions stringent by rendering an unregistered agreement inoperative, 
and so forth, also the giving of discretion to the registrar as to regis- 
tering, and to the judge as to reopening an entry within six months 
for fraud or undue influence. 



REVIEW OF AWARD. 



The difficulty arose of determining, under first schedule (2) and 
(1.2), when and to what extent the compensation granted should be 
reduced. 

From the workmen's standpoint, as they got only one-half of 
their loss to begin with, it was advocated and decided by some judges 
that this one-half wage compensation allowance should not be 
reduced until they could again earn full wages, and that no reduction 
of compensation should take place so long as what they earned, while 
partially incapacitated, added to the compensation allowed, was not 
more than their full wages before the accident. Other judges 
divided the loss, holding that the difference between their partial 
earnings and their full wages should be divided, the employer bearing 
one-half the loss and the workman bearing one-half. The committee 
recommended a more explicit clause adopting the latter mode, thus 
making the workman share the loss with the employer. 

The test of earning capacity had proved to be another difficulty, 
as, for instance, to determine whether a man who had lost one eye 
was incapacitated, etc. It was suggested that in the highly organized 
trades something approaching a tariff for injuries might ultimately be 
agreed on, apart from parliamentary enactment. The committee 
thought earning capacity, not only at the same kind of work as before 
the accident, but at any kind of work, should suffice, and strongly 
recommended clearer enactment. They advocated bringing the 
medical representatives of employer and workman together at an 
earlier stage, with the official medical referee as arbiter. 



46 workmen's compensation. 

As to increase of weekly payments, it was found that in practice 
the maximum payment had been so universally allowed that the 
provision for increase had become unimportant. 

NOTICE OF ACCIDENT AND CLAIM. 

The requirement in section 2 (1) for notice of accident as soon as 
practicable after the happening thereof caused laxness in practice 
and resulted in employers' complaints that it failed to attain the 
object of enabling them to verify the facts and ascertain the nature 
and extent of the injury. The committee recommended a limit of 
six days for notice. As to the claim for compensation the House of 
Lords had decided that a mere demand was sufficient to entitle the 
workman at any time thereafter to institute proceedings. The 
committee recommended that a written notice of claim be required in 
three months after the accident. After the expiry of these periods, 
however, they recommended that leave be given to the workman to 
file a sworn statement before the registrar showing sufficient reason 
for the necessary steps not having been taken within the limited time, 
that notice of this action be served on the employer, and if the latter 
should object to waiving notice that the registrar should refer the 
matter for decision of the judge. 

CONTRACTING OUT. 

As to the effect on mutual benefit and friendly societies, the com- 
mittee found that where these were supported jointly by the workmen 
and employers such schemes had been practically put an end to by 
the act, except in those cases where schemes were framed under 
section 3 of the act, through the discontinuance of employers' con- 
tributions. They found, however, that in some cases voluntary 
arrangements continued unaffected by the act, where employers were 
already providing benefits on a more liberal scale than the act, and 
that workmen's benefit clubs, which were entirely supported by the 
workmen, continued. There was evidence submitted that through 
these benefit funds, etc., workmen sometimes received more when 
disabled than if working. 

The committee, in considering the contracting out of the act by 
contracting into definite schemes under section 3, found that, owing 
to the expense and trouble such schemes entail on both employers and 
workmen, no extensive use had been made of the section, and they 
also found that under those schemes which had been certified under 
the section, the actual payments exceeded the maximum that the 
act would have paid by 75 per cent, 65 per cent of that excess being 
pay for the first two weeks not covered by the act. Both workmen's 
and employers' representatives testified that the schemes, being based 
on the active cooperation of and being jointly administered by masters 
and workmen, brought special advantages over the act provisions, such 
as permitting provision for minor accidents, allowances for old age, 
and annuities instead of lump sums. They testified that the schemes 
led to prevention of accident, to litigation being reduced to a mini- 
mum, and to good feeling being promoted. 

Mr. J. D. Stuart Sim, the chief registrar of friendly societies, char- 
acterizes section 3 as a splendid opportunity for regulating the rela- 



WORKMEN" S COMPENSATION. 



47 



tions between workmen and masters in a thoroughly satisfactory 
manner and on a sound financial basis; while Sir George Livesey, 
the chairman of the extensive South Metropolitan Gas Co., has 
succeeded in demonstrating the practicability of such a regulation 
in his 10 years' operation of a successful copartnership arrangement 
with all employees, one feature of which is his jury system, namely, 
having all accidents in his plants submitted to a jury of workmen, 
resulting in a large reduction of accidents, which feature was specially 
commended by the committee, who thoroughly indorsed the fact that 
the above advantages from the section existed, and recommended 
that it remain practically unchanged. 

The following is a summary of receipts and expenditures of work- 
men's compensation schemes authorized by the registrar of friendly 
societies, under the workmen's compensation acts of 1897 and 1900, 
for the seven years from 1898 to 1905: 

Summary of receipts and expenditures of workmen' s compensation schemes authorized by 
the registrar of friendly societies under the workmen's compensation act for the 7-year 
period 1898 to 1905. 

[From Report of the Chief Registrar of Friendly Societies for the year ending Dec. 31, 1905, Pt. A.] 



Items. 



Railways. 



Facte, ies. Mines. Quarries. Total 



Number of schemes 

Average number of workmen contracting out. 

RECEIPTS. 



Contributions of— 

Workmen 

Employers 

Interest on investments. 

Other receipts 



Total receipts 

EXPENDITURES. 

Benefits for death from — 

Injury 

Natural causes 

Benefits for incapacity: 

Weekly payments 

Lump-sum payments 

Medical aid 

Subscriptions to hospitals, etc. , 

Other benefits 

Law costs 

Other payments 

Management expenses 



Total. 



Funds on hand at end of period. 



2 

38,491 



$296, 185 
578, 918 



875, 103 



237, 101 



542. 668 
70,482 



4,194 



854,445 



20,658 



24 

21, 100 



28 

58, 638 



2 

861 



56 

119,090 



$107,054 

221,295 

8, 453 

1,649 



$995,238 

1,334,944 

95,846 

14,600 



$6, 370 

12,025 

389 

862 



$1,404,847 

2, 147, 182 

104, 688 

17,111 



338,451 I 2,440,628 



19, 646 



3,673,828 



41,589 
1,402 

138, 067 

17,534 

11,811 

4,088 

40,344 

516 

23,125 

4,526 



283,002 



70,725 



231,475 
23,247 

928, 684 
71,153 
99.530 
13.003 

130, 680 

6,341 

38, 684 

169,004 



1,711.801 



501 
117 

7,018 
365 

2,681 
453 

1.309 



3,129 
978 



510, 666 
24, 766 

1,616,437 

159.534 

114,022 

17,544 

176,527 

6,857 

64,938 

174,508 



16.551 



2,865,799 



804, 700 



6,993 



903,076 



SCHEME ADOPTED BY GOVERNMENT EMPLOYEES. 

Following are the benefits under the scheme authorized by the 
registrar of friendly societies for Government establishments: 

For death of a workman leaving dependents wholly dependent, 
three years' earnings, or not less than £150 ($729.98) nor more than 
£300 ($1,459.95), payable to the dependents or to a trustee; if the 
dependents are only in part dependent, one-half of the above; if there 
are no dependents, nor more than £10 ($48.67), for medical attend- 
ance and burial. In the discretion of the treasury, a portion of the 



48 wokkmen's compensation. 

lump sum payable, up to one-half if there is one dependent child or up 
to two-thirds if there are more than one, may be set aside, and a 
pension equal to the annuity which the remainder of the lump sum 
would purchase granted to the widow or mother. 

For incapacity, up to six months, one-half the average wages and 
hospital or medical attention while the beneficiary is on the hurt list, 
but "more favorable treatment while on the hurt list" if he is entitled 
to this under the regulations of his department. 

For incapacity beyond six months, the following proportions of his 
average weekly earnings, according to degree of incapacity: Capacity 
totally destroyed, twenty-four-sixtieths of his earnings; materially 
impaired, eighteen-sixtieths ; impaired, twelve-sixtieths; slightly im- 
paired, six-sixtieths. If he contmues in or returns to the Government 
service after the injury, the above allowance to be paid in addition to 
the earnings he then receives, up to the average full earnings before 
the injury, with periodical adjustments as sanctioned by the treasury. 
If he leaves the service and is entitled to a pension, the above allow- 
ance to be added to the pension, provided both together shall not 
exceed his earnings at time of injury or £300 ($1,459.95) a year, which- 
ever is the less. 

If the workman is a minor, the above compensation may be in- 
creased, in the discretion of the treasury, upon his reaching the age 
when in ordinary circumstances the pay of an adult workman would 
be granted him. 

Commutation of allowance to a single payment may be made on 
agreement between the workman and the authorities of the depart- 
ment, with sanction of the treasury. 

A claim for an injury which occurred more than three years before 
such claim was preferred can not be entertained unless such injury 
caused the applicant's discharge from the service or diminished his 
prospects for future employment. 

BENEFICIAL EFFECT OF THE ACT. 

As regards workmen, the committee found that the acts had con- 
ferred substantial benefits on those included in them; that prior to 
them practically the whole burden of industrial accident had fallen on 
the workmen, and it was right and necessary that some systematic 
provision for relief by law should be provided; that the act gave sub- 
stantial relief , not complete indemnity, and there was little complaint 
from workmen of the limitation to one-half wages and other maximum 
limits in them. 

Personal inquiry by the author concerning the practical workings 
of the act made during 1906 of Government officials, of employers, 
and of representatives of labor disclosed a unanimity of opinion that 
the principle of the act was sound, the extent to which it should be 
carried being the only question. The act was said to have proved a 
great boon to the workmen covered by it, labor strongly advocating 
its extension, while employers generally accepted it. In the building 
trades the secretary of one of the conciliation boards of a large master 
builders' association said that the principle was accepted by employ- 
ers; that the burden was transferred to the building owner and not to 
wages, which had risen; that the act had tended to prevention of acci- 
dent, as it had stimulated employers to have better plans; that it had 



workmen's compensation. 49 

reduced litigation, which was largely confined to nonunion workmen. 
In the cotton trade a gentleman who was thoroughly informed as to 
its effect on that trade said that there had been no risk of injury to the 
trade through the burden of the act; that it had not, however, fallen 
on wages, which had increased 10 per cent; that the act had operated 
strongly as a prevention of accident, the monetary liability for every 
accident, as well as the trade mutual insurance inspection, conducing 
thereto; that it had caused a large reduction in negligence claims, and 
that litigation on test cases under the act had practically disappeared, 
so that friction was reduced to a minimum, while the administration 
cost nothing, as no lawyers were necessary. As regards railways, 
an influential employees' organization said that the principle was 
regarded as absolutely just and valuable to the recipients of the bene- 
fits and had kept many from the poorhouse; that the burden was gen- 
erally conceded to have been transferred to the public; that it did not 
come out of wages, which had increased (only reaching them to the 
extent of 25 per cent of the compensation paid in unorganized trades) ; 
that litigation on questions of law had now practically disappeared, 
most cases being settled without even arbitration, and that arbitration 
cost little, generally under £5 ($24.33) a case; that the act had 
tended to prevent accidents, owing to expense now arising for every 
accident; moreover, that there had been no case of deliberate self- 
injury on railroads. A representative of the coal miners corroborated 
the fact that all labor was in favor of the act and illustrated the almost 
automatic working of it in the case of the Durham miners. 

The parliamentary attitude toward workmen's compensation is 
shown by the fact that the compensation act of 1897 had been intro- 
duced and passed by the Conservative party, while, in 1906, the oppo- 
site party, then in power — the Liberal party — introduced and passed 
an amending bill, extending the principles of the act to practically 
every relation of master and servant, and adding thereto compensa- 
tion for certain specified trade diseases. The act of 1906 becomes 
operative after July 1, 1907. The text of this act is given in full in this 
bulletin. 

Laws of a similar character to the workmen's compensation acts 
have superseded the negligence basis for treatment of industrial acci- 
dents in almost all the countries of Europe, as well as in the colonies 
of England. However, when it is remembered that England is a 
free-trade country, with consequent difficulty in transferring the bur- 
den of the act to their foreign consumers, their nine years' experience 
of the satisfactory working of it is the strongest possible argument 
in favor of the feasibility of such legislation. Considering the over- 
whelming extent to which the energies of this country are directed 
into mechanical industry and the high ratio of accident to population 
therefrom, entailing such widespread hardship through the haphazard 
treatment of each accident on the negligence basis, with its result of 
serious injustice in so many cases to employer and workmen alike, 
as well as the enormous waste of energy and money in the ever- 
increasing volume of personal-injury litigation, which clogs our courts, 
it is manifest that the subject requires the earnest and careful con- 
sideration of serious people. Nor is it unlikely that the principle of 
a wise and practical step toward the solution of this difficult, but 
most important, subject may be found in the British workmen's 
compensation acts. 

S. Doc. 618, 62-2 4 



WORKMEN'S COMPENSATION ACT, 1897. 



Following is the text of the workmen's compensation act, 1897, 
and of the workmen's compensation act, 1900, which extends the 
benefits of the act of 1897 to workmen in agriculture: 

AN ACT To amend the law with respect to compensation to workmen for accidental injuries suffered in 

the course of their employment [6th Aug., 1897]. 

Be it enacted by * * * Parliament assembled, and by the authority of the same, as 
follows: 

1. — (1) If in any employment to which this act applies personal injury by accident 
arising out of and in the course of the employment is caused to a workman, his 
employer shall, subject as hereinafter mentioned, be liable to pay compensation in 
accordance with the first schedule to this act. 

(2) Provided that— 

(a) The employer shall not be liable under this act in respect of any injury which 
does not disable the workman for a period of at least two weeks from earning full 
wages at the work at which he was employed; 

(6) When the injury was caused by the personal negligence or willful act of the 
employer, or of some person for whose act or default the employer is responsible, 
nothing in this act shall affect any civil liability of the employer, but in that case 
the workman may, at his option, either claim compensation under this act or take the 
same proceedings as were open to him before the commencement of this act; but 
the employer shall not be liable to pay compensation for injury to a workman by acci- 
dent arising out of and in the course of the employment both independently of and 
also under this act, and shall not be liable to any proceedings independently of this 
act, except in case of such personal negligence or willful act as aforesaid. 

(c) If it is proved that the injury to a workman is attributable to the serious and 
willful misconduct of that workman, any compensation claimed in respect of that 
injury shall be disallowed. 

(3) If any question arises in any proceedings under this act as to the liability to 
pay compensation under this act (including any question as to whether the employ- 
ment is one to which this act applies), or as to the amount or duration of compensation 
under this act, the question, if not settled by agreement, shall, subject to the provi- 
sions of the first schedule to this act, be settled by arbitration, in accordance with the 
second schedule to this act. 

(4) If, within the time hereinafter in this act limited for taking proceedings, an 
action is brought to recover damages independently of this act for injury caused by 
any accident, and it is determined in such action that the injury is one for which 
the employer is not liable in such action, but that he would have been liable to pay 
compensation under the provisions of this act, the action shall be dismissed; but the 
court in which the action is tried shall, if the plaintiff shall so choose, proceed to 
assess such compensation, and shall be at liberty to deduct from such compensation 
all the costs which, in its judgment, have been caused by the plaintiff bringing the 
action instead of proceeding under this act. 

In any proceeding under this subsection, when the court assesses the compensa- 
tion it shall give a certificate of the compensation it has awarded and the directions 
it has given as to the deduction for costs, and such certificate shall have the force and 
effect of an award under this act. 

(5) Nothing in this act shall affect any proceeding for a fine under the enactments 
relating to mines or factories, or the application of any such fine; but if any such fine, 
or any part thereof, has been applied for the benefit of the person injured, the amount 
so applied shall be taken into account in estimating the compensation under this 
act. 

2. — (1) Proceedings for the recovery under this act of compensation for an injury 
shall not be maintainable unless notice of the accident has been given as soon as prac- 

50 



WORKMEN 's COMPENSATION. 51 

ticable after the happening thereof and before the workman has voluntarily left the 
employment in which he was injured, and unless the claim for compensation with 
respect to such accident has been made within six months from the occurrence of 
the accident causing the injury, or, in case of death, within six months from the time 
of death. Provided always that the want of or any defect or inaccuracy in such 
notice shall not be a bar to the maintenance of such proceedings, if it is found in the 
proceedings for settling the claim that the employer is not prejudiced in his defense 
by the want, defect, or inaccuracy, or that such want, defect, or inaccurracy was 
occasioned by mistake or other reasonable cause. 

(2) Notice in respect of an inquiry under this act shall give the name and address 
of the person injured, and shall state in ordinary language the cause of the injury and 
the date at which it was sustained, and shall be served on the employer, or, if there 
is more than one employer, upon one of such employers. 

(3) The notice may be served by delivering the same to or at the residence or place 
of business of the person on whom it is to be served. 

(4) The notice may also be served by post by registered letter, addressed to the per- 
son on whom it is to be served at his last known place of residence or place of business, 
and if served by post shall be deemed to have been served at the time when the letter 
containing the same would have been delivered in the ordinary course of post, and in 
proving the service of such notice it shall be sufficient to prove that the notice was 
properly addressed and registered. 

(5) Where the employer is a body of persons corporate or unincorporate, the notice 
may also be served by delivering the same at or by sending it by post in a registered 
letter addressed to the employer at the office, or, if there be more than one office, any 
one of the offices of such body. 

3 . (1 ) If the registrar of friendly societies, after taking steps to ascertain the views 
of the employer and workmen, certifies that any scheme of compensation, benefit, or 
insurance for the workmen of an employer in any employment, whether or not such 
scheme includes other employers and their workmen, is on the whole not less favorable 
to the general body of workmen and their dependents than the provisions of this act, 
the employer may, until the certificate is revoked, contract with any of those workmen 
that the provisions of the scheme shall be substituted for the provisions of this act, and 
thereupon the employer shall be liable only in accordance with the scheme, but, save 
as aforesaid, this act shall apply notwithstanding any contract to the contrary made 
after the commencement of this act. 

(2) The registrar may give a certificate to expire at the end. of a limited period not 
less than five years. 

(3) No scheme shall be so certified which contains an obligation upon the workmen to 
join the scheme as a condition of their hiring. 

(4) If complaint is made to the registrar of friendly societies by or on behalf of the 
workmen of any employer that the provisions of any scheme are no longer on the whole 
so favorable to the general body of workmen of such employer and their dependents as 
the provisions of this act, or that the provisions of such scheme are being violated, or 
that the scheme is not being fairly administered, or that satisfactory reasons exist for 
revoking the certificate, the registrar shall examine into the complaint, and, if satisfied 
that good cause exists for such complaint, shall, unless the cause of complaint is re- 
moved, revoke the certificate. 

(5) When a certificate is revoked or expires any moneys or securities held for the 
purpose of the scheme shall be distributed as may be arranged between the employer 
and workmen, or as may be determined by the registrar of friendly societies in the event 
of a difference of opinion. 

(6) Whenever a scheme has been certified as aforesaid, it shall be the duty of the 
employer to answer all such inquiries and to furnish all such accounts in regard to the 
scheme as may be made or required by the registrar of friendly societies. 

(7) The chief registrar of friendly societies shall include in his annual report the 
particulars of the proceedings of the registrar under this act. 

4. Where, in an employment to which this act applies, the undertakers as herein- 
after defined contract with any person for the execution by or under such contractor 
of any work, and the undertakers would, if such work were executed by workmen 
immediately employed by them, be liable to pay compensation under this act to those 
workmen in respect of any accident arising out of and in the course of their employ- 
ment, the undertakers shall be liable to pay to any workman employed in the execu- 
tion of the work any compensation which is payable to the workman (whether under 
this act or in respect of personal negligence or willful act independently of this act) 
by such contractor, or would be so payable if such contractor were an employer t© 
whom this act applies. 

Provided that the undertakers shall be entitled to be indemnified by any other per- 
son who would have been liable independently of this section. 



52 workmen's compensation. 

This section shall not apply to any contract with any person for the execution by or 
under such contractor of any work which is merely ancillary or incidental to and is 
no part of or process in the trade or business carried on by such undertakers 
respectively. 

5. (1) Where any employer becomes liable under this act to pay compensation in 
respect of any accident, and is entitled to any sum from insurers in respect of the 
amount due to a workman under such liability, then, in the event of the employer 
becoming bankrupt or making a composition or arrangement with his creditors, or if the 
employer is a company of the company having commenced to be wound up, such 
workman shall have a first charge upon the sum aforesaid for the amount so due, and 
the judge of the county court may direct the insurers to pay such sum into the Post 
Office Savings Bank in the name of the registrar of such court and order the same to be 
invested or applied in accordance with the provisions of the first schedule hereto with 
reference to the investment in the Post Office Savings Bank of any sum allotted as 
compensation, and those provisions shall apply accordingly. 

(2) In the application of this section to Scotland, the words "have a first charge 
upon " shall mean "be preferentially entitled to. " 

6. Where the injury for which compensation is payable under this act was caused 
under circumstances creating a legal liability in some person other than the employer 
to pay damages in respect thereof, the workman may, at his option, proceed either at 
law against that person to recover damages or against his employer for compensation 
under this act, but not against both, and if compensation be paid under this act, the 
employer shall be entitled to be indemnified by the said other person. 

7. (1) This act shall apply only to employment by the undertakers as hereinafter 
defined, on or in or about a railway, factory, mine, quarry, or engineering work, and to 
employment by the undertakers as hereinafter defined on, in, or about any building 
which exceeds 30 feet in height, and is either being constructed or repaired by means 
of a scaffolding, or being demolished, or on which machinery driven by steam, water, 
other mechanical power is being used for the purpose of the construction, repair, or 
demolition thereof. 

(2) In this act — 

"Railway" means the railway of any railway company to which the regulation of 
railways act, 1873, applies, and includes a light railway made under the light railways 
act, 1896; and "railway" and "railway company" have the same meaning as in the 
said acts of 1873 and 1896; 

"Factory" has the same meaning as in the factory and workshop acts, 1878 to 1891, 
and also includes any dock, wharf, quay, warehouse, machinery, or plant to which 
any provision of the factory acts is applied by the factory and workshop act, 1895, 
and every laundry worked by steam, water, or other mechanical power; 

"Mine" means amine to which the coalmines regulation act, 1887, of the metal- 
liferious mines regulation act, 1872, applies; 

"Quarry" means a quarry under the quarries act, 1894. 

"Engineering work" means any work of construction or alteration or repair of a 
railroad, harbor, dock, canal, or sewer, and includes any other work for the construction, 
alteration, or repair of which machinery driven by steam, water, or other mechanical 
power is used; 

"Undertakers" in the case of a railway means the railway company; in the case of 
a factory, quarry, or laundry means the occupier thereof within the meaning of the 
factory and workshop acts, 1878 to 1895; in the case of a mine means the owner thereof 
within the meaning of the coal mines regulation act, 1887, or the metalliferous mines 
regulation act, 1872, as the case may be, and in the case of an engineering work means 
the person undertaking the construction, alteration, or repair; and in th? case of a 
building means the persons undertaking the construction, repair, or demolition; 

"Employer" includes anybody or persons, corporate or unincorporate, and the 
legal personal representative of a deceased employer; 

"Workman " includes every person who is engaged in an employment to which this 
act applies, whether by way of manual labor or otherwise, and whether his agreement 
is one of service or apprenticeship or otherwise, and is expressed or implied, is oral or 
in writing. Any reference to a workman who has been injured shall, where the work- 
man is dead, include a reference to his legal personal representative or to his depend- 
«nts or other person to whom compensation is payable: 

"Dependents" means — 

(a) In England and Ireland, such members of the workman's family specified in the 
iatal-accidents act, 1846, as were wholly or in part dependent upon the earnings of the 
workman at the time of his death; and 

(b) In Scotland, such of the persons entitled according to the law of Scotland to sue 
the employer for damages or solatium in respect of the death of the workman as were 
wholly or in part dependent upon the earnings of the workman at the time of his death. 



workmen's compensation. 53 

(3) A workman employed in a factory which is a shipbuilding yard shall not be ex- 
cluded from this act by reason only that the accident arose outside the yard in the 
course of his work upon a vessel in any dock, river, or tidal water near the yard . 

8. — (1) This act shall not apply to persons in the naval or military service of the 
Crown, but otherwise shall apply to any employment by or under the Crown to which 
this act would apply if the employer were a private person. 

(2) The Treasury may, by warrant laid before Parliament, modify for the purposes 
of this act their warrant made under section 1 of the superannuation act, 1887, and 
notwithstanding anything in that act, or any such warrant, may frame a scheme with 
a view to its being certified by the registrar of friendly societies under this act. 

9. Any contract existing at the commencement of this act whereby a workman 
relinquishes any right to compensation from the employer for personal injury arising 
out of and in the course of his employment shall not, for the purposes of this act, be 
deemed to continue after the time at which the workman's contract of service would 
determine if notice of the determination thereof were given at the commencement of 
this act. 

10. — (1) This act shall come into operation on the 1st day of July, 1898. 

(2) This act may be cited as the workmen's compensation act, 1897. 



SCHEDULES. 

First Schedule. 

scale and conditions of compensation. 

Scale. — (1) The amount of compensation under this act shall be — 

(a) Where death results from the injury— 

(i) If the workman leaves any dependents wholly dependent upon his earnings at 
the time of his death, a sum equal to his earnings in the employment of the same 
employer during the three years next preceding the injury, or the sum of £150 ($729.98) 
whichever of those sums is the larger, but not exceeding in any case £300 ($1,459.95), 
provided that the amount of any weekly payments made under this act shall be 
deducted from such sum, and if the period of the workman's employment by the said 
employer has been less than the said three years, then the amount of his earnings 
during the said three years shall be deemed to be 156 times his average weekly earn- 
ings during the period of his actual employment under the said employer; 

(ii) If the workman does not leave any such dependents, but leaves any depend- 
ents in part dependent upon his earnings at the time of his death, such sum, not ex- 
ceeding in any case the amount payable under the foregoing provisions, as may be 
agreed upon, or, in default of agreement, may be determined, on arbitration under 
this act, to be reasonable and proportionate to the injury to the said dependents; and 

(iii) If he leaves no dependents, the reasonable expenses of his medical attendance 
and burial, not exceeding £10 ($48.67); 

(6) Where total or partial incapacity for work results from the injury, a weekly pay- 
ment during the incapacity after the second week, not exceeding 50 per cent of his 
average weekly earnings during the previous 12 months, if he has been so long em- 
ployed, but if not, then for any less period during which he has been in the employ- 
ment of the same employer, such weekly payment not to exceed £1 ($4.87). 

(2) In fixing the amount of the weekly payment, regard shall be had to the differ- 
ence between the amount of the average weekly earnings of the workman before the 
accident and the average amount which he is able to earn after the accident, and to 
any payment not being wages which he may receive from the employer in respect 
to his injury during the period of his incapacity. 

(3) Where a workman has given notice of an accident, he shall, if so required by the 
employer, submit himself for examination by a duly qualified medical practitioner 
provided and paid by the employer, and if he refuses to submit himself to such exami- 
nation, or in any way obstructs the same, his right to compensation, and any proceed- 
ing under this act in relation to compensation, shall be suspended until such examina- 
tion takes place. 

(4) The payment shall, in case of death, be made to the legal personal representative 
of the workman, or, if he has no legal personal representative, to or fcr the benefit of 
his dependents, or, if he leaves no dependents, to the person to whom the expenses are 
due; and if made to the legal personal representative, shall be paid by him to or for 
the benefit of the dependents or other person entitled thereto under this act. 

(5) Any question as to who is a dependent, or as to the amount payable to each 
dependent, shall, in default of agreement, be settled by arbitration under this act. 



54 WORKMEN *S COMPENSATION. 

(6) The sum allotted as compensation to a dependent may be invested or otherwise 
applied for the benefit of the person entitled thereto, as agreed, or as ordered by the 
committee or other arbitrator. 

(7) Any sum which is agreed or is ordered by the committee or arbitrator to be 
invested may be invested in whole or in part in the Post Office Savings Bank by the 
registrar of the county court in his name as registrar. 

(8) Any sum to be so invested may be invested in the purchase of an annuity from 
the national debt commissioners through the Post Office Savings Bank, or be accepted 
by the postmaster general as a deposit in the name of the registrar as such, and the 
provisions of any statute or regulations respecting the limits of deposits in savings 
Ibank, and the declaration to be made by a depositor, shall not apply to such sums. 

(9) No part of any money invested in the name of the registrar of any county court 
in the Post Office Savings Bank under this act shall be paid out, except upon authority 
addressed to the postmaster general by the treasury or by the judge of the county 
court. 

(10) Any person deriving any benefit from any moneys invested in a post-office 
savings bank under the provisions of this act may nevertheless open an account in a 
post-office savings bank or in any other savings bank in his own name without being 
liable to any penalties imposed by any statute or regulations in respect of the opening 
of accounts in two savings banks, or of two accounts in the same savings banks. 

(11) Any workman receiving weekly payments under this act shall, if so required 
by the employer, or by any person by whom the employer is entitled under this act 
to be indemnified, from time to time submit himself for examination by a duly quali- 
fied medical practitioner provided and paid by the employer, or such other person; 
but if the workman objects to an examination by that medical practitioner, or is 
dissatisfied by the certificate of such practitioner upon his condition when communi- 
cated to him, he may submit himself for examination to one of the medical prac- 
titioners appointed for the purpose of this act, as mentioned in the second schedule 
to this act, and the certificate of that medical practitioner as to the condition of the 
workman at the time of the examination shall be given to the employer and workman, 
and shall be conclusive evidence of that condition. If the workman refuses to submit 
himself to such examination or in any way obstructs the same, his right to such weekly 
payments shall be suspended until such examination has taken place. 

(12) Any weekly payment may be reviewed at the request of either of the employer 
or of the workman, and on such review may be ended, diminished, or increased, sub- 
ject to the maximum above provided, and the amount of payment shall, in default 
of agreement, be settled by arbitration under this act. 

(13) Where any weekly payment has been continued for not less than six months, 
the liability therefor may, on the application by or on behalf of the employer, be re- 
deemed by the payment of a lump sum, to be settled, in default of agreement, by 
arbitration under this act, and such lump sum may be ordered by the committee or 
arbitrator to be invested or otherwise applied as above mentioned. 

(14) A weekly payment, or a sum paid by way of redemption thereof, shall not be 
capable of being assigned, charged, or attached, and shall not pass to any other per- 
son by operation of law, nor shall any claim be set off against the same. 

(15) Where a scheme certified under this act provides for payment of compensation 
by a friendly society, the provisions of the proviso to the first subsection of section 8, 
section 16, and section 41 of the friendly societies act, 1896, shall not apply to such 
society in respect of such scheme. 

(16) In the application of this schedule to Scotland the expression "registrar of the 
county court" means "sheriff clerk of the county," and "judge of the county court" 
means "sheriff." 

(17) In the application of this act to Ireland the provisions of the county officers 
and courts (Ireland) act, 1897, with respect to money deposited in the post-office 
savings bank under that act shall apply to money invested in the post-office savings 
bank under this act. 

Second Schedule, 
arbitration. 

The following provisions shall apply for settling any matter which under his act 
is to be settled by arbitration: 

(1) If any committee, representative of an employer and his workmen, exists with 
j> ower to settle matters under this act in the case of the employer and workmen, the 
matter shall, unless either party objects, by notice in writing sent to the other party 
Before the committee meet to consider the matter, be settled by the arbitration of 



workmen's compensation. 55 

such committee, or be referred by them in their discretion to arbitrate as hereinafter 
provided. 

(2) If either party so objects, or there is no such committee, or the committee so 
refers the matter or fails to settle the matter within three months from the date of the 
claim, the matter shall be settled by a single arbitrator agreed on by the parties, or 
in the absence of agreement by the county court judge, according to the procedure 
prescribed by rules of court, or if in England the lord chancellor so authorizes, accord- 
ing to the like procedure by a single arbitrator appointed by such county court judge. 

(3) Any arbitrator appointed by the county court judge shall, for the purpose of 
this act, have all the powers of a county court judge, and shall be paid out of moneys 
to be provided by Parliament in accordance with regulations to be made by the 
treasury. 

(4) The arbitration act, 1889, shall not apply to any arbitration under his act, but 
an arbitrator may, if he thinks fit, submit any question of law for the decision of the 
county court judge, and the decision of the judge on any question of law, either on 
such submission or in any case where he himself settles the matter under this act, 
shall be final, unless within the time and in accordance with the conditions prescribed 
by rules of the supreme court either party appeals to the court of appeal; and the 
county court judge, or the arbitrator appointed by him, shall, for the the purpose of 
an arbitration under this act, have the same powers of procuring the attendance of 
witnesses and the production of documents as if the claim for compensation had 
been made by plaint in the county court. 

(5) Rules of court may make provision for the appearance in any arbitration under 
this act of any party by some other person. 

(6) The costs of and incident to the arbitration and proceedings connected therewith 
shall be in the discretion of the arbitrator. The costs, whether before an arbitrator 
or in the county court, shall not exceed the limit prescribed by rules of court, and shall 
be taxed in manner prescribed by those rules. 

(7) In the case of the death or refusal or inability to act of an arbitrator, a judge of 
the high court at chambers may, on application of any party, appoint a new arbitrator. 

(8) Where the amount of compensation under this act shall have been ascertained, 
or any weekly payment varied, or any other matter decided, under this act, either by 
a committee or by an arbitrator or by agreement, a memorandum thereof shall be sent, 
in manner prescribed by rules of court, by the said committee or arbitrator, or by any 
party interested, to the registrar of the county court for the district in which any 
person entitled to such compensation resides, who shall, subject to such rules, on 
being satisfied as to its genuineness, record such memorandum in a special register 
without fee, and thereupon the said memorandum shall for all purposes be enforceable 
as a county court judgment. Provided that the county court judge may at any time 
rectify such register. 

(9) Where any matter under this act is to be done in a county court, or by, to, or 
before the judge or registrar of a county court, then, unless the contrary intention 
appear, the same shall, subject to rules of court, be done in, or by, to, or before the 
judge or registrar of the county court of the district in which all the parties concerned 
reside, or if they reside in different districts the district in which the accident out of 
which the said matter arose occurred, without prejudice to any transfer in manner 
provided by rules of court. 

(10) The duty of a county court judge under this act, or of an arbitrator appointed 
by him, shall, subject to rules of court, be part of the duties of the county court, and 
the officers of the court shall act accordingly, and rules of court may be made both for 
any purpose for which this act authorizes rules of court to be made, and also generally 
for carrying into effect this act so far as it affects the county court, or an arbitrator 
appointed by the judge of the county court, and proceedings in the county court or 
before any such arbitrator, and such rules may, in England, be made by the five 
judges of the county courts appointed for the making of rules under section 164 of the 
county courts act, 1888, and when allowed by the Lord Chancellor, as provided by 
that section, shall have full effect without any further consent. 

(11) No court fee shall be payable by any party in respect of any proceeding under 
this act in the county court prior to the award. 

(12) Any sum awarded as compensation shall be paid on the receipt of the person to 
whom it is payable under any agreement or award, and his solicitor or agent shall not 
be entitled to recover from him, or to claim a lien on, or deduct any amount for costs 
from, the said sum awarded, except such sum as may be awarded by the arbitrator or 
county court judge, on an application made by either party to determine the amount 
of costs to be paid to the said solicitor or agent, such sum to be awarded subject to 
taxation and to the scale of costs prescribed by rules of court. 



56 workmen's compensation. 

(13) The secretary of state may appoint legally qualified medical practitioners for 
the purpose of this act, and any committee, arbitrator, or judge may, subject to regu- 
lations made by the secretary of state and the treasury, appoint any such practitioner 
to report on any matter which seems material to any question arising in the arbitra- 
tion; and the expense of any such medical practitioner shall, subject to treasury 
regulations, be paid out of moneys to be provided by Parliament. 

(14) In the application of this schedule to Scotland — 

(a) " Sheriff" shall be substituted for "county court judge," "sheriff court" for 
"county court," "action" for "plaint," "sheriff clerk" for "registrar of the county 
court," and "act of sederunt" for "rules of court." 

(6) Any award or agreement as to compensation under this act may be compe- 
tently recorded for execution in the books of council and session or sheriff court 
books, and shall be enforceable in like manner as a recorded decree arbitral. 

(c) Any application to the sheriff as arbitrator shall be heard, tried, and determined 
summarily in the manner provided by the fifty-second section of the sheriff courts 
(Scotland) act, 1876, save only that parties may be represented by any person author- 
ized in writing to appear for them and subject to the declaration that it shall be com- 
petent to either party within the time and in accordance with the conditions pre- 
scribed by act of sederunt to require the sheriff to state a case on any question of law 
determined by him, and his decision thereon in such case may be submitted to either 
division of the court of session, who may hear and determine the same finally, and 
remit to the sheriff with instruction as to the judgment to be announced. 

(15) Paragraphs 4 and 7 of this schedule shall not apply to Scotland. 

(16) In the application of this schedule to Ireland the expression "county court 
judge" shall include the recorder of any city or town. 



WORKMEN'S COMPENSATION ACT, 1900. 



An act to extend the benefits of the workmen's compensation act, 1897, to workmen in agriculture [301 h 

July, 1900]. 

Be it enacted by * * * Parliament assembled, and by the authority of the same, as 
follows: 

1. (1) From and after the commencement of this act, the workmen's compensation 
act, 1897 ; shall apply to the employment of workmen in agriculture by any employer 
who habitually employs one or more workmen in such employment. 

(2) Where any such employer agrees with a contractor for the execution by or under 
that contractor of any work in agriculture, section 4 of the workmen's compensation 
act, 1897, shall apply in respect of any workman employed in such work as if that 
employer were an undertaker within the meaning of that act. 

Provided that where the contractor provides and uses machinery driven by mechan- 
ical power for the purpose of threshing, plowing, or other agricultural work, he, and 
he alone, shall be liable under this act to pay compensation to any workman employed 
by him on such work. 

(3) Where any workman is employed by the same employer mainly in agriculture 
but partly or occasionally in other work, this act shall apply also to the employment 
of the workman in such other work. 

The expression "agriculture" includes horticulture, forestry, and the use of land 
for any purpose of husbandry, inclusive of the keeping or breeding of live stock, 
poultry, or bees, and the growth of fruit and vegetables. 

2. This act may be cited as the workmen's compensation act, 1900, and shall be 
read as one with the workmen's compensation act, 1897, and that act and this act may 
be cited together as the workmen's compensation acts, 1897 and 1900. 

3. This act shall come into operation on the 1st day of July, 1901. 

Changes made by the Amending Act — The Workmen's Compensation Act 

of 1906. 

(In effect July 1, 1907.) 

The extension of the scope of the old act — 

By covering all manual workers and all other employees who earn $1,216.63 per 
annum or less (including seamen), under contract of service or apprenticeship (police- 
men and home workers alone excepted). (Clauses 7 and 13.) 

By covering certain scheduled diseases resulting from occupation, with power in 
the secretary of state to add to them. (Clause 8 and third schedule.) 

By compensating from date of accident excepting when total period of disability is 
less than 14 days, in which cases first 7 days not to be compensated (clause 1 (2), (a), 
and first schedule (1), proviso (6) ) instead of including entirely the first two weeks. 

By compensating death and serious permanent disablement cases, though caused 
by serious and willful misconduct (clause 1 (2), (c) ). (It was pointed out that the 
sufferers in such cases were the family of the negligent man rather than the negligent 
man himself.) 

By adding to the dependent relatives illegitimate children and parents and grand- 
parents thereof; brother, sister, half brother. (Clause 13.) 

By raising the maximum allowance of minors to full wages, not exceeding $2.43 
per week (first schedule (1), (6), proviso (6) ) and authorizing increase of their com- 
pensation to half what they would have been earning as their ages advanced. (First 
schedule (16), proviso.) 

By changing the basis of the compensation from the "actual " earnings in the service 
to the wages "ordinarily earned in the occupation. " (First schedule (2).) 

By removing the restriction that the accident must happen "on, in, or about 
employer's premises." 

Other changes: 

57 



58 workmen's compensation. 

Limiting the amount of commutations of weekly benefits to 75 per cent of the annuity 
value of such weekly payments in permanent cases in order to promote commutation 
of them. (First schedule (17).) 

Controlling the commutation by permitting official discretion as to registering or 
refusing to register, if amount insufficient, or obtained by undue influence or improper 
means; and if registered by authorizing the judge within six months to upset the 
settlement if satisfied it was obtained by undue influence or improper means. Unreg- 
istered agreements made not to be binding. (Second schedule (9) and (10) ). 

Minor changes were — 

Allowing the judge to assess "part of the costs, if the employee sued and failed under 
the negligence law" (instead of only "the whole" of them required by the old act) 
against him; in practice the judges having imposed no penalty, considering the total 
costs too high a penalty. And allowing the employee to receive the fines imposed on 
employers under the factory acts in addition to his compensation. (Sec. 1.) 

For "failure to give notice," absence from the United Kingdom was specified as an 
acceptable excuse. (Sec. 2.) 

In cases of "contracting into schemes more favorable than the act," the discretion 
of the Government official in deciding was somewhat restricted, and a proviso was 
added "that a workman may withdraw from any scheme." (Sec. 3.) 

Though the undertaker, now called the principal, is still liable to subcontractor's 
men, section 4 limits the liability to "accidents on the premises or work under the 
control of the principal," and also for accidents caused by strangers, with a right to 
recovery over against the subcontractor or stranger, the workman, however, being 
permitted an alternative remedy against both. (Sees. 4 and 6.) 

If "insolvency" occurs, vests the rights of employers (if insured) against their 
insurers in the workmen, and makes them creditors of the employers' estates for any 
unpaid balance of compensation due them ; also giving a priority on the bankrupt's 
estate up to $487; with a special priority for "minors," provided there is no such 
insurance. (Sec. 5.) 

Provides for reports to the State by employers of all injuries and payments. (Sec. 
12.) 

Limits the amount payable in case of partial incapacity. (First schedule (3).) 

Death payments (and those to persons under legal disability) are required "to be 
paid into the county court." (Unless no dependents), distributable according to its 
discretion. (First schedule (5) and (7).) 

More minute provision is made than in the old act "for deciding" disputes as to 
"who is a dependent" and as to "amounts payable to each." (First schedule (8).) 

The court is authorized to vary former orders or awards, as to apportionment or 
investment, on change of circumstances. (First schedule (9).) 

Provisions are made for examination by the medical referee paid by the State (sec. 
10), and his certificate to be final, in six days after copy of report of either the employer's 
or workman's doctor is furnished, if a disagreement exists. (First schedule (14) and 

( 15 )-) 
Weekly-payment cases, on the injured workman ceasing to reside in the United 

Kingdom, unless the medical referee certifies the injury is likely to be permanent. 

(First schedule (18).) 

The county court judge is permitted to use a medical referee as an assessor. (Second 
schedule (5).) 

Costs in arbitrations may be reviewed by the judge. (Second schedule (7).) 

Authorizes the use of medical referee by committee, arbitrator, or judge. (Second 
schedule (15).) 

The secretary of state can confer on any committee of employer and workmen the 
powers conferred on county courts. (Second schedule (16).) 



BRITISH WORKMEN'S COMPENSATION ACT OF 1906. 



In the following pages is given in full the text of the British work- 
men's compensation act of 1906, enacted December 21, 1906, to take 
effect July 1, 1907. It is given here to complete the record to date 
of British legislation in regard to the compensation of workmen for 
injuries received in their employment: 

AN ACT To consolidate and amend the law with respect to compensation to workmen for injuries suf- 
fered in the course of their employment [21st Dec, 1906]. 

Be it enacted by * * * Parliament assembled, and by the authority of the same, as 
follows: 

1. (1) If in any employment personal injury by accident arising out of and in the 
course of the employment is caused to a workman, his employer shall, subject as 
hereinafter mentioned, be liable to pay compensation in accordance with the first 
schedule of this act. 

(2) Provided that— 

(a) The employer shall not be liable under this act in respect of any injury which 
does not disable the workman for a period of at least one week from earning full wages 
at the work at which he was employed. 

(6) When the injury was caused by the personal negligence or willful act of the 
employer, or of some person for whose act or default the employer is responsible, 
nothing in this act shall affect any civil liability of the employer, but in that case 
the workman may, at his option, either claim compensation under this act or take 
proceedings independently of this act; but the employer shall not be liable to pay 
compensation for injury to a workman by accident arising out of and in the course of 
the employment both independently of and also under this act, and shall not be liable 
to any proceedings independently of this act except in case of such personal negligence 
or willful act as aforesaid. 

(c) If it is proved that the injury to a workman is attributable to the serious and 
willful misconduct of that workman, any compensation claimed in respect of that 
injury shall, unless the injury results in death or serious and permanent disablement 
be disallowed. 

(3) If any question arises in any proceedings under this act as to the liability to 
pay compensation under this act (including any question as to whether the person 
injured is a workman to whom this act applies), or as to ths amount or duration of 
compensation under this act, the question, if not settled by agreement, shall, subject 
to the provisions of the first schedule of this act, be settled by arbitration, in accord- 
ance with the second schedule of this act. 

(4) If, within the time hereinafter in this act limited for taking proceedings, an 
action is brought to recover damages independently of this act for injury caused by 
any accident, and it is determined in such action that the injury is one for which the 
employer is not liable in such action, but that he would have been liable to pay com- 
pensation under the provisions of this act, the action shall be dismissed; but the 
court in which the action is tried shall, if the plaintiff so choose, proceed to assess such 
compensation, but may deduct from such compensation all or part of the costs which, 
in its judgment, have been caused by the plaintiff bringing the action instead of 
proceeding under this act. In any proceeding under this subsection, when the court 
assesses the compensation it shall give a certificate of the compensation it has awarded 
and the directions it has given as to the deduction for costs, and such certificate shall 
have the force and effect of an award under this act. 

(5) Nothing in this act shall affect any proceeding for a fine under the enactments 
relating to mines, factories, or workshops, or the application of any such fine. 

2. (1) Proceedings for the recovery under this act of compensation for an injury 
shall not be maintainable unless notice of the accident has been given as soon as 

59 



60 workmen's compensation. 

practicable after the happening thereof and before the workman has voluntarily left 
the employment in which he was injured, and unless the claim for compensation 
with respect to such accident has been made within six months from the occurrence of 
the accident causing the injury, or, in case of death, within six months from the time 
of death. 

Provided always that — ■ 

(a) The want of or any defect or inaccuracy in such notice shall not be a bar to the 
maintenance of such proceedings if it is found in the proceedings for settling the claim 
that the employer is not, or would not, if a notice or an amended notice were then 
given and the hearing postponed, be prejudiced in his defense by the want, defect, 
or inaccuracy, or that such want, defect, or inaccuracy was occasioned by mistake, 
absence from the United Kingdom, or other reasonable cause; and 

(6) The failure to make a claim within the period above specified shall not be a 
bar to the maintenance of such proceedings if it is found that the failure was occasioned 
by mistake, absence from the United Kingdom, or other reasonable cause. 

(2) Notice in respect of an injury under this act shall give the name and address 
of the person injured, and shall state in ordinary language the cause of the injury and 
the date at which the accident happened, and shall be served on the employer, or, 
if there is more than one employer, upon one of such employers. 

(3) The notice may be served by delivering the same at, or sending it by post in a 
registered letter addressed to, the residence or place of business of the person on 
whom it is to be served. 

(4) Where the employer is a body of persons, corporate or unincorporate, the notice 
may also be served by delivering the same at, or by sending it by post in a registered 
letter addressed to, the employer at the office, or, if there be more than one office, any 
one of the offices of such body. 

3. (1) If the registrar of friendly societies, after taking steps to ascertain the views 
of the employer and workmen, certifies that any scheme of compensation, benefit, 
or insurance for the workmen of an employer in any employment, whether or not 
such scheme includes other employers and their workmen, provides scales of com- 
pensation not less favorable to the workmen and their dependents than the correspond- 
ing scales contained in this act, and that, where the scheme provides for contributions 
by the workmen, the scheme confers benefits at least equivalent to those contribu- 
tions, in addition to the benefits to which the workmen would have been entitled 
under this act, and that a majority (to be ascertained by ballot) of the workmen to 
whom the scheme is applicable are in favor of such scheme, the employer may, whilst 
the certificate is in force, contract with any of his workmen that the provisions of the 
scheme shall be substituted for the provisions of this act, and thereupon the employer 
shall be liable only in accordance with the scheme, but, save as aforesaid, this act 
shall apply notwithstanding any contract to the contrary made after the commence- 
ment of this act. 

(2) The registrar may give a certificate to expire at the end of a limited period of 
not less than five years, and may from time to time renew with or without modifica- 
tions such a certificate to expire at the end of the period for which it is renewed. 

(3) No scheme shall be so certified which contains an obligation upon the work- 
men to join the scheme as a condition of their hiring, or which does not contain pro- 
visions enabling a workman to withdraw from the scheme. 

(4) If complaint is made to the registrar of friendly societies by or on behalf of the 
workmen of any employer that the benefits conferred by any scheme no longer con- 
form to the conditions stated in subsection (1) of this section, or that the provisions of 
such scheme are being violated, or that the scheme is not being fairly administered, or 
that satisfactory reasons exist for revoking the certificate, the registrar shall examine 
into the complaint, and, if satisfied that good cause exists for such complaint, shall, 
unless the cause of complaint is removed, revoke the certificate. 

(5) When a certificate is revoked or expires, any moneys or securities held for the 
purpose of the scheme shall, after due provision has been made to discharge the liabili- 
ties already accrued, be distributed as may be arranged between the employer and 
workmen, or as may be determined by the registrar of friendly societies in the event of a 
difference of opinion. 

(6) Whenever a scheme has been certified as aforesaid, it shall be the duty of the 
employer to answer all such inquiries and to furnish all such accounts in regard to the 
.scheme as may be made or required by the registrar of friendly societies. 

(7) The chief registrar of friendly societies shall include in his annual report the 
particulars of the proceedings of the registrar under this act. 

(8) The chief registrar of friendly societies may make regulations for the purpose of 
carrying this section into effect. 

4. — (1) Where any person (in this section referred to as the principal), in the course 
of or for the purposes of his trade or business, contracts with any other person (in this 



workmen's compensation. 61 

section referred to as the contractor) for the execution by or under the contractor of tl e 
whole or any part of any work undertaken by the principal, the principal shall t e 
liable to pay to any workman employed in the execution of the work any compensa- 
tion under this act which he would have been liable to pay if that workman had been 
immediately employed by him; and where compensation is claimed from or proceed- 
ings are taken against the principal, then, in the application of this act, references to 
the principal shall he substituted for references to the employer, except that the 
amount of compensation shall be calculated with reference to the earnings of the 
workman under the employer by whom he is immediately employed: Provided, That 
where the contract relates to thrashing, plowing, or other agricultural work, and the 
contractor provides and uses machinery driven by mechanical power for the purpose of 
such work, he, and he alone, shall be liable under this act to pay compensation to any 
workman employed by him on such work. 

(2) Where the principal is liable to pay compensation under this section, he shall 
be entitled to be indemnified by any person who would have been liable to pay com- 
pensation to the workman independently of this section, and all question as to the right 
to and amount of any such indemnity shall, in default of agreement, be settled by arbi- 
tration under this act. 

(3) Nothing in this section shall be construed as preventing a workman recovering 
compensation under this act from the contractor instead of the principal. 

(4) This section shall not apply in any case where the accident occurred elsewhere 
than on or in or about premises on which the principal has undertaken to execute the 
work or which are otherwise under his control or management. 

5. — (1) Where any employer has entered into a contract with any insurers in respect 
of any liability under this act to any workman, then, in the event of the employer 
becoming bankrupt or making a composition or arrangement with his creditors, or if 
the employer is a company, in the event of the company having commenced to be 
wound up, the rights of the employer against the insurers as respects that liability 
shall, notwithstanding anything in the enactments relating to bankruptcy and the 
winding up of companies, be transferred to and vest in the workman, and upon any 
such transfer the insurers shall have the same rights and remedies and be subject to 
the same liabilities as if they were the employer, so, however, that the insurers shall 
not be under any greater liability to the workman than they would have been under 
to the employer. 

(2) If the liability of the insurers to the workman is less than the liability of the 
employer to the workman, the workman may prove for the balance in the bankruptcy 
or liquidation. 

(3) There shall be included among the debts which, under section 1 of the prefer- 
ential payments in bankruptcy act, 1888, and section 4 of the preferential payments 
in bankruptcy (Ireland) act, 1889, are in the distribution of the property of a bankrupt 
and in the distribution of the assets of a company being wound up to be paid in pri- 
ority to all other debts, the amount, not exceeding in any individual case, £100, due 
in respect of any compensation the liability wherefor accrued before the date of the 
receiving order or the date of the commencement of the winding up, and those acts 
and the preferential payments in bankruptcy amendment act, 1897, shall have effect 
accordingly. Where the compensation is a weekly payment, the amount due in 
respect thereof shall, for the purposes of this provision, be taken to be the amount of 
the lump sum for which the weekly payment could, if redeemable, be redeemed if the 
employer made an application for that purpose under the first schedule to this act. 

(4) In the case of the winding up of a company within the meaning of the Stannaries 
Act, 1887, such an amount as aforesaid, if the compensation is payable to a miner or 
the dependents of a miner, shall have the like priority as is conferred on wages of 
miners by section 9 of that act, and that section shall have effect accordingly. 

(5) The provisions of this section with respect to preferences and priorities shall not 
apply where the bankrupt or the company being wound up has entered into such a 
contract with insurers as aforesaid. 

(6) This section shall not apply where a company is wound up voluntarily merely 
for the purposes of reconstruction or of amalgamation with another company. 

6. Where the injury for which compensation is payable under this act was caused 
under circumstances creating a legal liability in some person other than the employer 
to pay damages in respect thereof — ■ 

(1) The workman may take proceedings both against that person to recover damages 
and against any person liable to pay compensation under this act for such compensa- 
tion, but shall not be entitled to recover both damages and compensation; and 

(2) If the workman has recovered compensation under this act, the person by whom 
the compensation was paid, and any person who has been called on to pay an indem- 
nity under the section of this act relating to subcontracting, shall be entitled to be 
indemnified by the person so liable to pay damages as aforesaid, and all questions as 



62 WORKMEN *S COMPENSATION. 

to the right to an amount of any such indemnity shall, in default of agreement, be 
settled by action, or, by consent of the parties, by arbitration under this act. 

7. — (1) This act shall apply to masters, seamen, and apprentices to the sea service 
and apprentices in the sea-fishing service, provided that such persons are workmen 
within the meaning of this act and are members of the crew of any ship registered in 
the United Kingdom or of any other British ship or vessel of which the owner or (if 
there is more than one owner) the managing owner or manager resides or has his prin- 
cipal place of business in the United Kingdom, subject to the following modifications: 

(a) The notice of accident and the claim for compensation may, except where the 
person injured is the master, be served on the master of the ship as if he were the em- 
ployer, but where the accident happened and the incapacity commenced on board 
the ship it shall not be necessary to give any notice of the accident. 

(6) In the case of the death of the master, seamen, or apprentice the claim for com- 
pensation shall be made within six months after news of the death has been received 
by the claimant. 

(c) Where an injured master, seaman, or apprentice is discharged or left behind in 
a British possession or in a foreign country, depositions respecting the circumstances 
and nature of the injury may be taken by any judge or magistrate in the British pos- 
session and by any British consular officer in the foreign country, and if so taken shall 
be transmitted by the person by whom they are taken to the board of trade, and such 
deposition or certified copies thereof shall in any proceedings for enforcing the claim 
be admissible in evidence as provided by sections 691 and 695 of the merchant ship- 
ping act, 1894, and those sections shall apply accordingly. 

(d) In the case of the death of a master, seaman, or apprentice, leaving no dependents, 
no compensation shall be payable if the owner of the ship is, under the merchant 
shipping act, 1894, liable to pay the expenses of burial. 

(e) The weekly payment shall not be payable in respect of the period during which 
the owner of the ship is, under the merchant shipping act, 1894, as amended by any 
subsequent enactment or otherwise, liable to defray the expenses of maintenance 
of the injured master, seaman, or apprentice. 

(/) Any sum payable by way of compensation by the owner of a ship under this act 
shall be paid in full, notwithstanding anything in section 503 of the merchant shipping 
act, 1894 (which relates to the limitation of a shipowner's liability in certain cases of 
loss of life, injury, or damage), but the limitation on the owner's liability imposed by 
that section shall apply to the amount recoverable by way of indemnity under the 
section of this act relating to remedies both against employer and stranger as if the 
indemnity were damages for loss of life or personal injury. 

(g) Subsections (2) and (3) of section 174 of the merchant shipping act, 1894 (which 
relates to the recovery of wages of seamen lost with their ship), shall apply as respects 
proceedings for the recovery of compensation by dependents of masters, seamen, and 
apprentices lost with their ship as they shall apply with respect to proceedings for the 
recovery of wages due to seamen and apprentices, and proceedings for the recovery 
of compensation shall in such a case be maintainable if the claim is made within 
18 months of the date at which the ship is deemed to have been lost with all hands. 

(2) This act shall not apply to such members of the crew of a fishing vessel as are 
remunerated by shares in the profits of the gross earnings of the working of such vessel. 

(3) This section shall extend to pilots to whom Part X of the merchant shipping 
act, 1894, applies, as if a pilot when employed on any such ship as aforesaid were a 
seaman and a member of the crew. 

8.— (1) Where— 

(i) The certifying surgeon appointed under the factory and workshop act, 1901, for 
the district in which a workman is employed certifies that the workman is suffering 
from a disease mentioned in the third schedule to this act and is thereby disabled from 
earning full wages at the work at which he was employed ; or, 

(ii) A workman is, in pursuance of any special rules or regulations made under the 
factory and workshop act, 1901, suspended from his usual employment on account of 
having contracted any such disease ; or, 

(iii) The death of a workman is caused by any such disease, and the disease is due 
to the nature of any employment in which the workman was employed at any time 
within 12 months previous to the date of the disablement or suspension, whether 
under one or more employers, he or his dependents shall be entitled to compensation 
under this act as if the disease or suspension as aforesaid were a personal injury by 
accident arising out of any in the course of that employment, subject to the following 
modifications: 

(a) The disablement or suspension shall be treated as the happening of the accident. 

(b) If it is proved that the workman has at the time of entering the employment 
willfully and falsely represented himself in writing as not having previously suffered 
from the disease, compensation shall not be payable. 



workmen's compensation. 63 

(c) The compensation shall be recoverable from the employer who last employed 
the workman during the said 12 months in the employment to the nature of which 
the disease was due. 

Provided that — 

(i) The workman or his dependents, if so required, shall furnish that employer with 
such information as to the names and addresses of all other employers who employed 
him in the employment during the said 12 months as he or they may possess, and, if 
such information is not furnished, or is not sufficient to enable that employer to take 
proceedings under the next following proviso, that employer, upon proving that the 
disease was not contracted while the workman was in his employment, shall not be 
liable to pay compensation; and, 

(ii) If that employer alleges that the disease was in fact contracted while the work- 
man was in the employment of some other employer and not while in his employment, 
he may join such other employer as a party to the arbitration, and if the allegation is 
proved that other employer shall be the employer from whom the compensation is to 
be recoverable; and, 

(iii) If the disease is of such a nature as to be contracted by a gradual process, any 
other employers who, during the said 12 months, employed the workman in the employ- 
ment to the nature of which the disease was due, shall be liable to make to the employer 
from whom compensation is recoverable such contributions as, in default of agreement, 
may be determined in the arbitration under this act for settling the amount of the 
compensation. 

(d) The amount of the compensation shall be calculated with reference to the 
earnings of the workman under the employer from whom the compensation is recover- 
able. 

(e) The employer to whom notice of the death, disablement, or suspension is to be 
given shall be the employer who last employed the workman during the said 12 months 
in the employment to the nature of which the disease was due, and the notice may be 
given, notwithstanding that the workman has voluntarily left his employment. 

(/) If an employer or a workman is aggrieved by the action of a certifying or other 
surgeon in giving or refusing to give a certificate of disablement or in suspending or 
refusing to suspend a workman for the purposes of this section, the matter shall, in 
accordance with regulations made by the secretary of state, be referred to a medical 
referee, whose decision shall be final. 

(2) If the workman at or immediately before the date of the disablement or suspen- 
sion was employed in any process mentioned in the second column of the third sched- 
ule to this act, and the disease contracted is the disease in the first column of that 
schedule set opposite the description of the process, the disease, except where the cer- 
tifying surgeon certifies that in his opinion the disease was not due to the nature of the 
employment, shall be deemed to have been due to the nature of that employment 
unless the employer proves the contrary. 

(3) The secretary of state may make rules regulating the duties and fees of certify- 
ing and other surgeons (including dentists) under this section. 

(4) For the purposes of this section the date of disablement shall be such date as the 
certifying surgeon certifies as the date on which the disablement commenced, or, if 
he is unable to certify such a date, the date on which the certificate is given. 

Provided that — 

(a) Where the medical referee allows an appeal against a refusal by a certifying 
surgeon to give a certificate of disablement, the date of disablement shall be such 
date as the medical referee may determine. 

(6) Where a workman dies without having obtained a certificate of disablement, or 
is, at the time of death, not in receipt of a weekly payment on account of disablement, 
it shall be the date of death. 

(5) In such cases, and subject to such conditions as the secretary of state may direct, 
a medical practitioner appointed by the secretary of state for the purpose shall have 
the powers and duties of a certifying surgeon under this section, and this section shall 
be construed accordingly. 

(6) The secretary of state may make orders for extending the provisions of this sec- 
tion to other diseases and other processes, and to injuries due to the nature of any 
employment specified in the order not being injuries by accident, either without 
modification or subject to such modifications as may be contained in the order. 

(7) Where, after inquiry held on the application of any employers or workman 
engaged in any industry to which this section applies, it appears that a mutual trade 
insurance company or society for insuring against the risks under this section has been 
established for the industry, and that a majority of the employers engaged in that 
industry are insured against such risks in the company or society and that the company 
or society consents, the secretary of state may, by provisional order, require all 
employers in that industry to insure in the company or society upon such terms and 



64 workmen's compensation. 

under such conditions and subject to such exceptions as may be set forth in the order. 
Where such a company or society has been established, but is confined to employers in 
any particular locality or of any particular class, the secretary of state may, for the 
purposes of this provision, treat the industry as carried on by employers in that locality 
or of that class as a separate industry. 

(8) A provisional order made under this section shall be of no force whatever unless 
and until it is confirmed by Parliament, and if, while the bill confirming any such 
order is pending in either House of Parliament, a petition is presented against the 
order, the bill may be referred to a select committee, and the petitioner shall be allowed 
to appear and oppose as in the case of private bills, and any act confirming any provi- 
sional order under this section may be repealed, altered, or amended by a provisional 
order made and confirmed in like manner. 

(9) Any expenses incurred by the secretary of state in respect of any such order, 
provisional order, or confirming bill shall be defrayed out of moneys provided by 
Parliament. 

(10) Nothing in this section shall affect the rights of a workman to recover compensa- 
tion in respect of a disease to which this section does not apply if the disease is a per- 
sonal injury by accident within the meaning of this act. 

9. — (1) This act shall not apply to persons in the naval or military service of the 
Crown, but otherwise shall apply to workmen employed by or under the Crown to 
whom this act would apply if the employer were a private person. 

Provided that in the case of a person employed in the private service of the Crown, 
the head of that department of the royal household in which he was employed at the 
time of the accident shall be deemed to be his employer. 

(2) The treasury may, by warrant laid before Parliament, modify for the purposes 
of this act their warrant made under section 1 of the superannuation act, 1887, and, 
notwithstanding anything in that act or any such warrant, may frame schemes with 
a view to their being certified by the registrar of friendly societies under this act. 

10. — (1) The secretary of state may appoint such legally qualified medical practi- 
tioners to be medical referees for the purposes of this act as he may, with the sanction 
of the treasury, determine, and the remuneration of, and other expenses incurred by, 
medical referees under this act shall, subject to regulations made by the treasury, be 
paid out of moneys provided by Parliament. 

Where a medical referee has been employed as a medical practitioner in connection 
with any case by or on behalf of an employer or workman or by any insurers interested, 
he shall not act as medical referee in that case. 

(2) The remuneration of an arbitrator appointed by a judge of county courts under 
the second schedule to this act shall be paid out of moneys provided by Parliament 
in accordance with regulations made by the treasury. 

11. — (1) If it is alleged that the owners of any ship are liable as such owners to pay 
compensation under this act, and at any time that ship is found in any port or river 
of England or Ireland, or within 3 miles of the coast thereof, a judge of any court of 
record in England or Ireland may, upon its being shown to him by any person apply- 
ing in accordance with the rules of the court that the owners are probably liable as 
such to pay such compensation, and that none of the owners reside in the United King- 
dom, issue an order directed to any officer of customs or other officer named by the 
judge requiring him to detain the ship until such time as the owners, agent, master, or 
consignee thereof have paid such compensation, or have given security, to be approved 
by the judge, to abide the event of any proceedings that may be instituted to recover 
such compensation and to pay such compensation and costs as may be awarded thereon; 
and any officer of customs or other officer to whom the order is directed shall detain the 
ship accordingly. 

(2) In any legal proceeding to recover such compensation the person giving security 
shall be made defendant, and the production of the order of the judge made in relation 
to the security shall be conclusive evidence of the liability of the defendant to the 
proceeding. 

(3) Section 692 of the merchant shipping act, 1894, shall apply to the detention of a 
ship under this act as it applies to the detention of a ship under that act, and if the 
owner of a ship is a corporation it shall for the purposes of this section be deemed to 
reside in the United Kingdom if it has an office in the United Kingdom at which 
service of writs can be effected. 

12. — (1) Every employer in any industry to which the secretary of state may direct 
that this section shall apply shall, on or before such day in every year as the secretary 
of state may direct, send to the secretary of state a correct return specifying the num- 
ber of injuries in respect of which compensation has been paid by him under this 
act during the previous year, and the amount of such compensation, together with 
euch other particulars as to the compensation as the secretary of state may direct, 



workmen's compensation. 65 

and in default of complying with this section shall be liable on conviction under the 
summary jurisdiction acts to a fine not exceeding <£5 ($24.33). 

(2) Any regulations made by the secretary of state containing such directions as 
aforesaid shall be laid before both Houses of Parliament as soon as may be after they 
are made. 

13. In this act, unless the context otherwise requires — 

"Employer" includes any body of persons, corporate or unincorporate, and the 
legal personal representative of a deceased employer, and, where the services of a 
workman are temporarily lent or let on hire to another person by the person with whom 
the workman has entered into a contract of service or apprenticeship, the latter shall, 
for the purposes of this act, be deemed to continue to be the employer of the work- 
man whilst he is working for that other person. 

"Workman" does not include any person employed otherwise than by way of 
manual labor whose remuneration exceeds £250 ($1,216.63) a year, or a person whose 
employment is of a casual nature and who is employed otherwise than for the purposes 
of the employer's trade or business, or a member of a police force, or an outworker, 
or a member of the employer's family dwelling in his house, but, save as aforesaid, 
means any person who has entered into or works under a contract of service or appren- 
ticeship with an employer, whetlier by way of manual labor, clerical work, or other- 
wise, and whether the contract is expressed or implied, is oral, or in writing. 

Any reference to a workman who has been injured shall, where the worcman is 
dead, include a reference to his legal personal representative or to his dependents or 
other persons to whom or for whose benefit compensation is payable. 

"Dependents" means such of the members of the workman's family as were wholly 
or in part dependent upon the earnings of the workman at the time of his death, or 
would but for the incapacity due to the accident have been so dependent, and where 
the workman, being the parent or grandparent of an illegitimate child, leaves such 
a child so dependent upon his earnings, or, being an illegitimate child, leaves a 
parent or grandparent so dependent upon his earnings, shall include such an illegiti- 
mate child and parent or grandparent, respectively. 

"Member of a family" means wife or husband, father, mother, grandfather, grand- 
mother, stepfather, stepmother, son, daughter, grandson, granddaughter, stepson, 
stepdaughter, brother, sister, half-brother, half-sister. 

"Ship," "vessel," "seaman," and "port" have the same meanings as in the mer- 
chant shipping act, 1894. 

"Manager," in relation to a ship, means the ship's husband or other person to whom 
the management of the ship is instructed by or on behalf of the owner. 

"Police force" means a police force to which the police act, 1890, or the police 
(Scotland) act, 1890, applies, the city of London police force, the Royal Irish con- 
stabulary, and the Dublin metropolitan police force. 

"Outworker" means a person to whom articles or materials are given out to be made 
up, cleaned, washed, altered, ornamented, finished, or repaired, or adapted for sale, 
in his own home or on other premises not under the control or management of the 
person who gave out the materials or articles. 

The exercise and performance of the powers and duties of a local or other public 
authority shall, for the purposes of this act, be treated as the trade or business of the 
authority. 

"County court," "judge of the county court," "register of the county court," 
"plaintiff," and "rules of court," as respects Scotland, mean, respectively, sheriff 
court, sheriff, sheriff clerk, pursuer, and act of sederunt. 

14. In Scotland, where a workman raises an action against his employer independ- 
ently of this act in respect of any injury caused by accident arising out of and in the 
course of the employment, the action, if raised in the sheriff court and concluding for 
damages under the employers' liability act, 1880, or alternatively at common law or 
under the employers' liability act, 1880, shall, notwithstanding anything contained 
in that act, not be removed under that act or otherwise to the court of session, nor 
shall it be appealed to that court otherwise than by appeal on a question of law ; and 
for the purposes of such appeal the provisions of the second schedule to this act in 
regard to an appeal from the decision of the sheriff on any question of law determined 
by him as arbitrator under this act shall apply. 

15. — (1) Any contract (other than a contract substituting the provisions of a scheme 
certified under the workmen's compensation act, 1897, for the provisions of that act) 
existing at the commencement of this act, whereby a workman relinquishes any right 
to compensation from the employer for personal injury arising out of and in the course 
of his employment, shall not, for the purposes of this act, be deemed to continue after 
the time at which the workman's contract of service would determine if notice of the 
determination thereof were given at the commencement of this act. 

S. Doc. 618, 62-2 5 



66 workmen's compensation. 

(2) Every scheme under the workmen's compensation act, 1897, in force at the 
commencement of this act shall, if recertified by the registrar of friendly societies, 
have effect as if it were a scheme under this act. 

(3) The registrar shall recertify any such scheme if it is proved to his satisfaction 
that the scheme conforms, or has been so modified as to conform, with the provisions 
of this act as to schemes. 

(4) If any such scheme has not been so recertified before the expiration of six 
months from the commencement of this act, the certificate thereof shall be revoked. 

16. — (1) This act shall come into operation on the 1st day of July, 1907, but, except 
so far as it relates to references to medical referees and proceedings consequential 
thereon, shall not apply in any case where the accident happened before the com- 
mencement of this act. 

(2) The workmen's compensation acts, 1897 and 1900, are hereby repealed, but 
shall continue to apply to cases where the accident happened before the commence- 
ment of this act, except to the extent to which this act applies to those cases. 

17. This act may be cited as the workmen's compensation act, 1906. 

First Schedule, 
scale and conditions of compensation. 

(1) The amount of compensation under this act shall be — 

(a) Where death results from the injury — 

(i) If the workman leaves any dependents wholly dependent upon his earnings, a 
sum equal to his earnings in the employment of the same employer during the three 
years next preceding the injury, or the sum of £150 ($729.98), whichever of those 
sums is the larger, but not exceeding in any case £300 ($1,459.95), provided that the 
amount of any weekly payments made under this act, and any lump sum paid in 
redemption thereof, shall be deducted from such sum, and, if the period of the work- 
man's employment by the said employer has been less than the said three years, then 
the amount of his earnings during the said three years shall be deemed to be 156 times 
his average weekly earnings during the period of his actual employment under the 
said employer; 

(ii) If the workman does not leave any such dependents, but leaves any dependents 
in part dependent upon his earnings, such sum, not exceeding in any case the amount 
payable under the foregoing provisions, as may be agreed upon, or, in default of agree- 
ment, may be determined, on arbitration under this act, to be reasonable and propor- 
tionate to the injury to the said dependents; and 

(iii) If he leaves no dependents, the reasonable expenses of his medical attendance 
and burial, not exceeding £10 ($48.67); 

(b) Where total or partial incapacity for work results from the injury, a weekly pay- 
ment during the incapacity not exceeding 50 per cent of his average weekly earnings 
during the previous 12 months, if he has been so long employed, but if not, then 
for any less period during which he has been in the employment of the same employer, 
such weekly payment not to exceed £1 ($4.87): 

Provided that — 

(a) If the incapacity lasts less than two weeks no compensation shall be payable in 
respect of the first week; and 

(6) As respects the weekly payments during total incapacity of a workman who is 
under 21 years of age at the date of the injury and whose average weekly earnings are 
less than 20 shillings ($4.87), 100 per cent shall be substituted for 50 per cent of his aver- 
age weekly earnings, but the weekly payment shall in no case exceed 10 shillings 
($2.43). 

(2) For the purposes of the provisions of this schedule relating to "earnings" and 
"average weekly earnings " of a workman, the following rules shall be observed: 

(a) Average weekly earnings shall be computed in such manner as is best calculated 
to give the rate per week at which the workman was being remunerated. Provided 
that where by reason of the shortness of the time during which the workman has been 
in the employment of his employer, or the casual nature of the employment, or the 
terms of the employment, it is impracticable at the date of the accident to compute 
the rate of remuneration, regard may be had to the average weekly amount which, 
during the 12 months previous to the accident, was being earned by a person in 
the same grade employed at the same work by the same employer, or, if there is no 
person so employed, by a person in the same grade employed in the same class of 
employment in the same district; 

(b) Where the workman had entered i: to concurrent contracts of service with two 
or more employers. under which he worked at one time for one such employer and at 



workmen's compensation. 67 

another time for another such employer, his average weekly earnings shall be com- 
puted as if his earnings under all such contracts were earnings in the employment of 
the employer for whom he was working at the time of the accident; 

(c) Employment by the same employer shall be taken to mean employment by the 
same employer in the grade in which the workman was employed at the time of the 
accident, uninterrupted by absence from work due to illness or any other unavoidable 
cause ; 

(d) Where the employer has been accustomed to pay to the workman a sum to cover 
any special expenses entailed on him by the nature of his employment, the sum so paid 
shall not be reckoned as part of the earnings. 

(3) In fixing the amount of the weekly payment, regard shall be had to any payment, 
allowance, or benefit which the workman may receive from the employer during the 
period of his incapacity, and in the case of partial incapacity the weekly payment 
shall in no case exceed the difference between the amount of the average weekly earn- 
ings of the workman before the accident and the average weekly amount which he is 
earning or is able to earn in some suitable employment or business after the accident, 
but shall bear such relation to the amount of that difference as under the circumstances 
of the case may appear proper. 

(4) Where a workman has given notice of an accident, he shall, if so required by the 
employer, submit himself for examination by a duly qualified medical practitioner 
provided and paid by the employer, and, if he refuses to submit himself to such exami- 
nation, or in any way obstructs the same, his right to compensation, and to take or 
prosecute any proceeding under this act in relation to compensation, shall be suspended 
until such examination has taken place. 

(5) The payment in the case of death shall, unless otherwise ordered as hereinafter 
provided, be paid into the county court, and any sum so paid into court shall, subject 
to rules of court and the provisions of this schedule, be invested, applied, or otherwise 
dealt with by the court in such manner as the court in its discretion thinks fit for the 
benefit of the persons entitled thereto under this act, and the receipt of the registrar of 
the court shall be a sufficient discharge in respect of the amount paid in: 

Provided that, if so agreed, the payment in case of death shall, if the workman leaves 
no dependents, be made to his legal personal representative, or, if he has no such repre- 
sentative, to the person to whom the expenses of medical attendance and burial are due. 

(6) Rules of court may provide for the transfer of money paid into court under this 
act from one court to another, whether or not the court from which it is to be trans- 
ferred is in the same part of the United Kingdom as the court to which it is to be 
transferred . 

(7) Where a weekly payment is payable under this act to a person under any legal 
disability, a county court may, on application being made in accordance with rules 
of court, order that the weekly payment be made during the disability into court, 
and the provisions of this schedule with respect to sums required by this schedule to 
be paid into court shall apply to sums paid into court in pursuance of any such order. 

(8) Any question as to who is a dependent shall, in default of agreement, be settled 
by arbitration under this act, or, if not so settled before payment into court under this 
schedule, shall be settled by the county court, and the amount payable to each depend- 
ent shall be settled by arbitration under this act, or, if not so settled before payment 
into court under this schedule, by the county court. Where there are both total and 
partial dependents nothing in this schedule shall be construed as preventing the com- 
pensation being allotted partly to the total and partly to the partial dependents. 

(9) Where, on application being made in accordance with rules of court, it appears 
to a county court that, on account of neglect of children on the part of a wliow, or on 
account of the variation of the circumstances of the various dependents, or for any 
other sufficient cause, an order of the court or an award as to the apportionment amongst 
the several dependents of any sum paid as compensation, or as to the manner in which 
any sum payable to any such dependent is to be invested, applied, or otherwise dealt 
with, ought to be varied, the court may make such order for the variation of the former 
order or the award, as in the circumstances of the case the court may think just. 

(10) Any sum which under this schedule is ordered to be invested may be invested 
in whole or in part in the Post Office Savings Bank by the registrar of the county court 
in his name as registrar. 

(11) Any sum to be so invested may be invested in the purchase of an annuity from 
the national debt commissioners through the Post Office Savings Bank, or be accepted 
by the postmaster general as a deposit in the name of the registrar as such, and the 
provisions of any statute or regulations respecting the limits of deposits in savings 
banks, and the declaration to be made by a depositor, shall not apply to such sums. 

(12) No part of any money invested in the name of the registrar of any county 
court in the Post Office Savings Bank under this act shall be paid out, except upon 



68 WORKMEN 's COMPENSATION. 

authority addressed to the postmaster general by the treasury or, subject to regula- 
tions of the treasury, by the judge or registrar of the county court. 

(13) Any person deriving any benefit from any moneys invested in a post-office 
savings bank under the provisions of this act may, nevertheless, open an account 
in a post-office savings bank or in any other savings bank in his own name without 
being liable to any penalties imposed by any statute or regulations in respect of the 
opening of accounts in two savings banks, or of two accounts in the same savings 
bank. 

(14) Any workman receiving weekly payments under this act shall, if so required 
by the employer, from time to time submit himself for examination by a duly qualified 
medical practitioner provided and paid by the employer. If the workman refuses 
to submit himself to such examination, or in any way obstructs the same, his right 
to such weekly payments shall be suspended until such examination has taken place. 

(15) A workman shall not be required to submit himself for examination by a medical 
practitioner under paragraph (4) or paragraph (14) of this schedule otherwise than in 
accordance with regulations made by the secretary of state, or at more frequent inter- 
vals than may be prescribed by these regulations. 

Where a workman has so submitted himself for examination by a medical practi- 
tioner, or has been examined by a medical practitioner selected by himself, and the 
employer or the workman, as the case may be, has within six days after such examina- 
tion furnished the other with a copy of the report of that practitioner as to the work- 
man's condition, then, in the event of no agreement being come to between the em- 
ployer and the workman as to the workman's condition or fitness for employment, 
the registrar of a county court, on application being made to the court by both parties 
may, on payment by the applicants of such fee not exceeding £1 ($4.87) as may be 
prescribed, refer the matter to a medical referee. 

The medical referee to whom the matter is so referred shall, in accordance with 
regulations made by the secretary of state, give a certificate as to the condition 
of the workman and his fitness for employment, specifying, where necessary, the 
kind of employment for which he is fit, and that certificate shall be conclusive evidence 
as to the matters so certified. 

Where no agreement can be come to between the employer and the workman as to 
whether or to what extent the incapacity of the workman is due to the accident, the 
provisions of this paragraph shall, subject to any regulations made by the secretary 
of state, apply as if the question were a question as to the condition of the workman. 

If a workman, on being required so to do, refuses to submit himself for examination 
by a medical referee to whom the matter has been so referred as aforesaid, or in any 
way obstructs the same, his right to compensation and to take or prosecute any pro 
ceeding under this act in relation to compensation, or, in the case of a workman in 
receipt of a weekly payment, his right to that weekly payment shall be suspended 
until such examination has taken place. 

Rules of court may be made for prescribing the manner in which documents are to 
be furnished or served and applications made under this paragraph and the forms 
to be used for those purposes and, subject to the consent of the treasury, as to the fee 
to be paid under this paragraph. 

(16) Any weekly payment may be reviewed at the request either of the employer 
or of the workman, and on such review may be ended, diminished, or increased, sub- 
ject to the maximum above provided, and the amount of payment shall, in default 
of agreement, be settled by arbitration under this act: Provided, That where the work- 
man was at the date of the accident under 21 years of age, and the review takes place 
more than 12 months after the accident, the amount of the weekly payments may be 
increased to any amount not exceeding 50 per cent of the weekly sum which the work- 
man would probably have been earning at the date of the review if he had remained 
uninjured, but not in any case exceeding £1 ($4.87). 

(17) Where any weekly payment has been continued for not less than six months, 
the liability therafor may, on application by or on behalf of the employer, be redeemed 
by the payment of a lump sum of such an amount as, where the incapacity is per- 
manent, would, if invested in the purchase of an immediate life annuity from the 
national debt commissioners through the post-office savings bank, purchase an annuity 
for the workman equal to 75 per cent of the annual value of the weekly payment, 
and as in any other case may be settled by arbitration under this act, and such lump 
sum may be ordered by the committee or arbitrator or judge of the county court to be 
invested or otherwise applied for the benefit of the person entitled thereto: Pro- 
vided, That nothing in this paragraph shall be construed as preventing agreements 
being made for the redemption of a weekly payment by a lump sum. 

(18) If a workman receiving a weekly payment ceases to reside in the United 
Kingdom, he shall thereupon cease to be entitled to receive any weekly payment, 



workmen's compensation. 69 

unless the medical referee certifies that the incapacity resulting from the injury is 
likely to be of a permanent nature. If the medical referee so certifies, the workman 
shall be entitled to receive quarterly the amount of the weekly payments accruing 
due during the preceding quarter so long as he proves, in such manner and at such 
intervals as may be prescribed by rules of court, his identity and the continuance of 
the incapacity in respect of which the weekly payment is payable. 

(19) A weekly payment, or a sum paid by way of redemption thereof, shall not be 
capable of being assigned, charged, or attached, and shall not pass to any other person 
by operation of law, nor shall any claim be set off against the same. 

(20) Where under this schedule a right to compensation is suspended, no compen- 
sation shall be payable in respect of the period of suspension. 

(21) Where a scheme certified under this act provides for payment of compensation 
by a friendly society, the provisions of the proviso to the first subsection of section 8, 
section 16, and section 41 of the friendly societies act, 1896, shall not apply to such 
society in respect of such scheme. 

(22) In the application of this act to Ireland the provisions of the county officers 
and courts (Ireland) act, 1877, with respect to money deposited in the post-office 
savings bank under that act shall apply to money invested in the post-office savings 
bank under this act. 

Second Schedule. 

arbitration, etc. 

(1) For the purpose of settling any matter which under this act is to be settled by 
arbitration, if any committee, representative of any employer and his workmen, 
exists with power to settle matters under this act in the case of the employer and 
workmen, the matter shall, unless either party objects by notice in writing sent to the 
other party before the committee meet to consider the matter, be settled by the 
arbitration of such committee, or be referred by them in their discretion to arbitration 
as hereinafter provided. 

(2) If either party so objects, or there is no such committee, or the committee so 
refers the matter or fails to settle the matter within six months from the date of the 
claim, the matter shall be settled by a single arbitrator agreed on by the parties, or in 
the absence of agreement by the judge of the county court, according to the procedure 
prescribed by rules of court. 

(3) In England the matter instead of being settled by the judge of the county court 
may, if the lord chancellor so authorizes, be settled according to the like procedure by 
a single arbitrator appointed by that judge, and the arbitrator so appointed shall, for 
the purposes of this act, have all the powers of that judge. 

(4) The arbitration act, 1889, shall not apply to any arbitration under this act; but 
a committee or an arbitrator may, if they or he think fit, submit any question of law 
for the decision of the judge of the county court, and the decision of the judge on any 
question of law, either on such submission or in any case where he himself settles the 
matter under this act, or where he gives any decision or makes any order under this 
act, shall be final, unless within the time and in accordance with the conditions pre- 
scribed by rules of the supreme court either party appeals to the court of appeal ; and 
the judge of the county court, or the arbitrator appointed by him, shall, for the pur- 
pose of proceedings under this act, have the same powers of procuring the attendance 
of witnesses and the production of documents as if the proceedings were an action in 
the county court. 

(5) A judge of county courts may, if he thinks fit, summon a medical referee to sit 
with him as an assessor. 

(6) Rules of court may make provision for the appearance in any arbitration under 
this act of any party by some other person. 

(7) The costs of and incidental to the arbitration and proceedings connected there- 
with shall be, in the discretion of the committee, arbitrator, or judge of the county 
court, subject as respects such judge and an arbitrator appointed by him to rules of 
court. The costs, whether before a committee or an arbitrator or in the county court, 
shall not exceed the limit prescribed by rules of court, and shall be taxed in manner 
prescribed by those rules, and such taxation may be reviewed by the judge of the 
county court. 

(8) In the case of the death or refusal or inability to act of an arbitrator, the judge 
of the county court may, on the application of any party, appoint a new arbitrator. 

(9) Where the amount of compensation under this act has been ascertained or any 
weekly payment varied or any other matter decided under this act, either by a com- 
mittee or by an arbitrator or by agreement, a memorandum thereof shall be sent, in 
manner prescribed by rules of court, by the committee or arbitrator, or by any party 



70 workmen's compensation. 

interested, to the registrar of the county court, who shall, subject to such rules, on being 
satisfied as to its genuineness, record such memorandum in a special register without 
fee, and thereupon the memorandum shall for all purposes be enforceable as a county 
court judgment. 

Provided that — 

(a) No such memorandum shall be recorded before seven days after the dispatch by 
the registrar of notice to the parties interested ; and 
. (b) Where a workman seeks to record a memorandum of agreement between his 
employer and himself for the payment of compensation under this act and the em- 
ployer, in accordance with rules of court, proves that the workman has in fact returned 
to work and is earning the same wages as he did before the accident, and objects to 
the recording of such memorandum, the memorandum shall only be recorded, if at 
all, on such terms as the judge of the county court under the circumstances may think 
just; and 

(c) The judge of the county court may at any time rectify the register; and 

(d) Where it appears to the registrar of the county court, on any information which 
he considers sufficient, that an agreement as to the redemption of a weekly payment by 
a lump sum, or an agreement as to the amount of compensation payable to a person 
under any legal disability, or to dependents, ought not to be registered by reason of 
the inadequacy of the sum or amount, or by reason of the agreement having been 
obtained by fraud or undue influence or other improper means, he may refuse to record 
the memorandum of the agreement sent to him for registration and refer the matter to 
the judge, who shall, in accordance with rules of court, make such order (including an 
order as to any sum already paid under the agreement) as under the circumstances he 
may think just; and 

(e) The judge may, within six months after a memorandum of an agreement as to 
the redemption of a weekly payment by a lump sum, or of an agreement as to the 
amount of compensation payable to a person under any legal disability, or to depend- 
ents, has been recorded in the register, order that the record be removed from the 
register on proof to his satisfaction that the agreement was obtained by fraud or undue 
influence or other improper means, and may make such order (including an order as 
to any sum already paid under the agreement) as under the circumstances he may 
think just. 

(10) An agreement as to the redemption of a weekly payment by a lump sum if not 
registered in accordance with this act shall not, nor shall the payment of the sum 
payable under the agreement, exempt the person by whom the weekly payment is 
payable from liability to continue to make that weekly payment, and an agreement 
as to the amount of compensation to be paid to a person under a legal disability or to 
dependents, if not so registered, shall not, nor shall the payment of the sum payable 
under the agreement, exempt the person by whom the compensation is payable from 
liability to pay compensation, unless, in either case, he proves that the failure to reg- 
ister was not due to any neglect or default on his part. 

(11) Where any matter under this act is to be done in a county court, or by, to, or 
before the judge or registrar of a county court, then, unless the contrary intention 
appear, the same shall, subject to rules of court, to be done in, or by, to, or before the 
judge or registrar of the county court of the district in which all the parties concerned 
reside, or if they reside in different districts the district prescribed by rules of court 
without prejudice to any transfer in manner provided by rules of court. 

(12) The duty of a judge of county courts under this act, or in England of an arbi- 
trator appointed by him, shall, subject to rules of court, be part of the duties of the 
county court, and the officers of the court shall act accordingly, and rules of court may 
be made both for any purpose for which this act authorizes rules of court to be made, 
and also generally for carrying into effect this act so far as it affects the county court, or 
an arbitrator appointed by the judge of the county court, and proceedings in the county 
court or before any such arbitrator, and such rules may in England be made by the 
five judges of county courts appointed for the making of rules under section 164 of the 
county courts act, 1888, and when allowed by the lord chancellor, as provided by that 
section, shall have full effect without any further consent. 

(13) No court fee, except such as may be prescribed under paragraph 15 of the first 
schedule to this act, shall be payable by any party in respect of any proceedings by 
or against a workman under this act in the court prior to the award. 

(14) Any sum awarded as compensation shall, unless paid into court under this act, 
be paid on the receipt of the person to whom it is payable under any agreement or 
award, and the solicitor or agent of a person claiming compensation under this act 
shall not be entitled to recover from him any costs in respect of any proceedings in 
an arbitration under this act, or to claim a lien in respect of such costs on, or deduct 
such costs from, the sum awarded or agreed as compensation, except the sum as may 



WORKMEN S COMPENSATION. 



71 



be awarded by the committee, the arbitrator, or the judge of the county court, on an 
application made either by the person claiming compensation, or by his solicitor or 
agent, to determine the amount of costs to be paid to the solicitor or agent, such sum 
to be awarded subject to taxation and to the scale of costs prescribed by rules of court. 

(15) Any committee, arbitrator, or judge may, subject to regulations made by the 
secretary of state and the treasury, submit to a medical referee for report any matter 
which seems material to any question arising in the arbitration. 

(16) The secretary of state may, by order, either unconditionally or subject to such 
conditions or modifications as he may think fit, confer on any committee representa- 
tive of any employer and his workmen, as respects any matter in which the committee 
act as arbitrators, or which is settled by agreement submitted to and approved by the 
committee, all or any of the powers conferred by this act exclusively on county courts, 
or judges of county courts, and may by the order provide how and to whom the com- 
pensation money is to be paid in cases where but for the order the money would be 
required to be paid into court, and the order may exclude from the operation of pro- 
visos (d) and (e) of paragraph (9) of this schedule agreements submitted to and ap- 
proved by the committee, and may contain such incidental, consequential, or sup- 
plemental provisions as may appear to the secretary of state to be necessary or proper 
for the purposes of the order. 

(17) In the application of this schedule to Scotland — 

(a) "County court judgment" as used in paragraph 9 of this schedule means a 
recorded decree arbitral. 

(6) Any application to the sheriff as arbitrator shall be heard, tried, and deter- 
mined summarily in the manner provided by section 52 of the sheriff courts (Scotland) 
act, 1876, save only that parties may be represented by any person authorized in writ- 
ing to appear for them, and subject to the declaration that it shall be competent to either 
party within the time and in accordance with the conditions prescribed by act of 
sederunt to require the sheriff to state a case on any question of law determined by 
him, and his decision thereon in such case may be submitted to either division of the 
court of session, who may hear and determine the same and remit to the sheriff with 
instruction as to the judgment to be pronounced, and an appeal shall lie from either 
of such divisions to the House of Lords. 

(c) Paragraphs 3, 4, and 8 shall not apply. 

(18) In the application of this schedule to Ireland the expression "judge of the 
county court " shall include the recorder of any city or town, and an appeal shall lie 
from the court of appeal to the House of Lords. 

THIRD SCHEDULE. 



Description of disease. 


Description of process. 


Anthrax 


Handling of wool, hair, bristles, hides, and skins. 


Lead poisoning or its sequelae 


Any process involving the use of lead or its preparations orcom- 


Mercury poisoning or its sequelae 

Phosphorus poisoning or its sequelae 
Arsenic poisoning or its sequelae 


pounds. 
Any process involving the use of mercury or its preparations or 

compounds. 
Any process involving the use of phosphorus or its preparations 

or compounds. 
Any process involving the use of arsenic or its preparations or 


Ankylostomiasis 


compounds. 
Mining. 





Where regulations or special rules made under any act of Parliament for the pro- 
tection of persons employed in any industry against the risk of contracting lead poison- 
ing require some or all of the persons employed in certain processes specified in the 
regulations or special rules to be periodically examined by a certifying or other surgeon, 
then, in the application of this schedule to that industry, the expression "process" 
shall, unless the secretary of state otherwise directs, include only the processes so 
specified. 

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